Fireside Chat: Interview with Citi's Christina Mohr

Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.

Chana Schoenberger (00:08):
Okay. I want to welcome an industry legend, the one and only Christina Mohr of Citi, who is the vice chair of M&A and Investment Banking, probably the biggest TMT banker in the business. And everybody knows her. I've already had one person today tell me they want to be Christina when they grow up. So welcome.

Christina Mohr (00:28):
Happily, neither of my daughters decided to do that. So that's good news. And I just need to correct one thing because I now have a fancier title.

Chana Schoenberger (00:36):
Okay. Sorry.

Christina Mohr (00:37):
Global chair.

Chana Schoenberger (00:42):
Wow. That's a local chair, but this is yes.

Christina Mohr (00:45):
This is clearly the global chair. Wow. Let me start by just saying one thing I'd like to get off my chest. Thank you. Thank you to everyone here who has done so much for all the women who work in our profession and financial services. When I got my first job in investment banking in—wait for it—1978. I know. I know I look younger than that, right? It's the hair. It's a dead giveaway. But in any event, and I refuse to color it anymore, I gave up. I mean, the last... no, can't do it. But in any case, when I got my first job in investment banking, the notion that banking, women, and power, that there was ever a Venn diagram that included those three words, it was non-existent. That just wasn't going to happen in my lifetime. And the fact that we are now in a position to celebrate the fact that there are powerful women in investment banking and banking writ large, I think is remarkable.

(01:56):
And it's a tribute to you, the organization you work with, and all of y'all out there in the audience. That's the plural of y'all, by the way. All of y'all out in the audience who have worked so hard to make this a reality. I hope that in 20 years when I'm sitting on a beach or riding my horse quietly somewhere in the Southwest, that—well, I won't jump anymore. But in any case, I hope that at that point I can look back and go, "Yeah, we don't need to do this anymore because we are powerful women in banking and everybody knows it and it's not extraordinary, but it was. It has been. And hopefully someday it won't be any longer." So thank you.

Chana Schoenberger (02:37):
Well, thank you. I mean, obviously this is about the women in the industry. And I'll just quote the male CEO of M&T Bank, Rene Jones, who spoke at our most powerful women banking gala a couple of years ago. And he said, "I'm so honored to be standing in front of the most powerful women in banking, or is it just the most powerful bankers in America?" And he got a 10-minute standing ovation for that. So whoever on his team wrote that speech for him did a great job. Anyway, okay. So give us just a quick precis of your storied and celebrated career. How did you get where you are today?

Christina Mohr (03:16):
I backed into it. I confess. We went to the same undergraduate institution as did your husband, my husband. And I thought that like most people who went to an Ivy League college in my era, you had a choice. You could either be a doctor—I'm sorry, I'm so afraid of blood, I can't even tell you. I don't even cut the steak. A lawyer—possible, but not really. Or you could go to graduate school. So I thought I was going to go to graduate school in economics. And so I started doing my graduate classes. I had this really cool job that put me through college, paid for my college actually, working for a place called Data Resources that did econometric modeling of the United States and the various industries. I was kind of a geek, which made it okay that I had a job doing something like that.

(04:15):
And at one point I said, "This is interesting, but this is the best job I'm going to get with my graduate degree in economics. What else should I do? Maybe I should go to business school." So I was taking a bunch of classes at the business school and I walked into one of the professors and said, "Should I go to business school?" He said, "Yes, you should go to business school." And so we marched over to see the Dean of Admissions and we agreed that I should go to business school, but we agreed that I was kind of immature. Now, can I just tell you, that's still true. There's part of me that's so counterdependent, I will never grow up and be that kind of mature person, but it is what it is. So they decided that I should go work at an investment bank.

(04:56):
And I didn't know what one was. I'd never heard of it. I came from a scientific community in California. So my father, until the day he died, thought I was a bank teller, that was it. But in any event, I ended up at a job at an investment bank that no longer exists. The deal was that I was to work there for a year, go back to business school, and be fine.

(05:22):
I loved it. I loved every second of it. I loved the commute down to Wall Street. I loved every minute of the day. And so I stayed an extra year. I went back to business school. I interviewed at a bunch of other jobs. This was during the Mary Cunningham year. So you were supposed to interview to be the assistant to the president of some big industrial company. No, it didn't have any of the fun and glamor and interest and day-to-day learning that the job I had in investment banking had had before. And so I went back and I've never looked back. I've done it every day since. I've had three jobs in my life. I was a Dairy Queen; I make a mean Dilly Bar and I know how to do the curly cue on the top.

Chana Schoenberger (06:14):
Big fan of the Blizzard. I will cross a divided highway for a Dairy Queen Blizzard.

Christina Mohr (06:18):
Yeah. What can I say? We all have our weaknesses. But in any case, I was an econometrician and then I've been an investment banker all the time. And by and large in M&A, the firm I started with had a big business called Takeover Defense. And so unfortunately, what we didn't know at the time was the guy who was running the business was feeding all the inside information to Ivan Boesky. So it actually ended up that you did need defense, but that was a different story, that was a different time. But in any case, I'd always been doing M&A. When I got out of business school and went back to one of the big firms, I was told that women couldn't do M&A unless they did sell side. And I was given the names of two or three people who were men who were going to be great at M&A.

(07:06):
And that was who would have that job, not me. So I said, "Okay, I'll go back and sell some convertibles or do something like that." Until such time as one of them ended up being arrested for insider trading, at which point I got the job. Who knew? So in any case, I've done M&A ever since. I had one detour running coverage groups. I've ran two coverage groups. Can I just tell you if any of you have tried to do coverage, it's really hard and I'm a B coverage person, but I'm really good at telling stories and doing M&A and that's where I'll stick until I end up on a beach or on a horse somewhere in the Southwest. Anyway, that's the story.

Chana Schoenberger (07:51):
So the career advice I'm hearing is be really good at your job until such time as your boss gets arrested and then take his job.

Christina Mohr (08:01):
Well, this is the one thing I must say for those of you who are younger, and this is my one piece of advice: you want the job of the person you're working for, for God's sakes. So act like it. Act like you want my job. So few of our analysts and associates and the younger people who work for us come in and go, "What can I do to have your job?" I'd give them my job at that point if they actually asked the question. So yes, that is the answer. Want my job, but I didn't take out the guy who was running M&A. I stuck out the guy who was an associate ahead of me. That's different. That's almost gentle.

Chana Schoenberger (08:52):
Yes.

Christina Mohr (08:53):
Kind.

Chana Schoenberger (08:54):
Well, certainly I think one other piece of advice would be don't be the person who gets arrested. Don't do insider trading.

Christina Mohr (09:02):
Yeah. Well, that's fair.

Chana Schoenberger (09:03):
Because you're definitely not getting the job if you're in jail.

Christina Mohr (09:06):
Well, and I think this was back in the '80s, no one understood how... not all bank systems are great, but there's one system that really works and that's the system the SEC has that tracks insider trading. Who knew?

Chana Schoenberger (09:23):
They catch them every time.

Christina Mohr (09:24):
Yep. They do.

Chana Schoenberger (09:25):
Don't do that.

Christina Mohr (09:25):
They do.

Chana Schoenberger (09:26):
And it happens every year too. It's always very funny. It's like, don't people read the newspaper?

Christina Mohr (09:33):
We go through all this... every one of y'all who's in a bank does all this compliance trading and still somebody tries to do something really silly. They're like, "Didn't we tell you that that wouldn't work?" We did, but no.

Chana Schoenberger (09:47):
They put things in emails. You are also famous for never putting anything in emails. Correct. In fact, to this day, your email signature has your office phone and your cell phone, and the cell phone says no texts.

Christina Mohr (10:00):
Yep. Well, that's right. Or I do have a stock email that says, "Call me."

Chana Schoenberger (10:11):
Right, because you should never put anything in email, because email's discoverable, guys.

Christina Mohr (10:17):
There's that. It's also... well, can you repeat that in the form of a question, please? Because I've never been deposed before.

Chana Schoenberger (10:26):
Anyway, okay. So let's talk about the M&A market. We reported on an M&A deal today. It was a bank buying another bank. Recently, at American Banker, we do this several times a week because M&A seems to really be on an upswing. What is it like in your industry?

Christina Mohr (10:41):
Well, we're having the second best year we've had in M&A ever. Globally, volumes are around 3.6 trillion up from about 4.4 trillion in 2021, which was the last big M&A year. By the way, that was helped a little bit by redefining public offerings as M&A transactions, but let's just start over that way. So it's a really terrific M&A year globally. It's also a terrific M&A year here in the US. Once again, around 2.2 trillion from about 2.6 trillion in 2021, driven largely by the same factors: strategic transactions, large transactions (i.e., $10 billion plus), and a real increase in tech and industrial transactions. In fact, 50% of the volume, both globally and domestically, are tech deals and industrial deals. Although I will say there's a 50% increase in bank deals globally. It's coming off a small base, but you're seeing a real increase in financial institutions and bank deals both globally and the beginnings of that in the US.

(12:04):
And I was touching on, if you look at the effects of the changes in regulation, they are profound. If you look at the time between announcement and close for a bank deal from about four or five years ago, it took about 500 and change days. I want to say 530, somewhere in that 500 range to close a bank deal. It's now taking sub 300, like 270 days to close a bank deal, which is a big change. It's a real profound difference in mindset among the regulators in terms of what makes sense and why people should do this. Obviously, the regulatory environment helps. I also think, frankly, the fixed cost of technology—it's not just AWS and their North Virginia Tech Center. These technology costs are huge, and having a larger platform on which to amortize those tech costs makes a ton of sense.

(13:14):
And then the other thing that is having an impact on bank transactions particularly is the fact that with interest rates coming down and spreads narrowing, you don't have that kind of asset hole that characterized some of the deals around two years ago. So I think you're going to, notwithstanding the fact there's what, 4,300 banks in this country—someone will probably correct me on that one, but I think it's about right—I think you'll continue to see some form of consolidation in the coming months and probably through this administration.

Chana Schoenberger (13:53):
Yeah. Right now there's about 4,500 banks and 4,500 credit unions and everybody is merging with one another.

Christina Mohr (14:01):
Right. It's interesting though, when you look at the impact of regulation, one of the things I was telling, we were talking about earlier... we'll do a test here. There was a lot made of the changes in the Hart-Scott-Rodino rules earlier this year. The forms got more complex. It went from taking a few days to fill out to several weeks to fill out. There was a big concern that was going to really slow the pace of transactions in the economy taken as a whole. During the Biden administration, there were 11 deals that were terminated early from the Hart-Scott-Rodino regime. Do you know what that number is in the Trump administration year to date?

Chana Schoenberger (14:50):
Zero.

Christina Mohr (14:53):
Oh, you are so far off.

Chana Schoenberger (14:56):
150?

Christina Mohr (14:57):
Closer. Really?

Chana Schoenberger (14:59):
Okay. I don't know.

Christina Mohr (15:00):
190, So far. The pace of clearance of transactions in the United States on the M&A side has accelerated from a drip to a gusher, a waterfall. And you're seeing structural remedies; you're seeing a vastly more transactional approach to solving perceivedproblems around competition than you saw in the last administration. It's remarkable the difference in attitude that you're seeing amongst the regulators towards transactions.
Chana Schoenberger (15:41):
Wow. Okay. So as an M&A banker, other than doing skips of glee, what does this mean for your life?

Christina Mohr (15:48):
Well, I think that what we're doing... well, one, there is a focus on strategic transactions, larger corporate deals. This is the time in which CEOs who have always wanted to do X—fill in the blank—say, "Let's try it now," because the cost of money's fairly low and the stock market's pretty high. You can put some stock into a deal. The regulatory environment, once again, is pretty decent. CEO confidence is at a high level. So it actually means that people are trying things that they might not have attempted historically and being rewarded for that by and large. So that's a big change, especially from 2023 when volumes in the US... I think M&A volume in 2023 was like a trillion five. It was like, "Find yourself another job, my friends." But the other thing that I think is interesting is the kind of non-deal restructurings you're seeing in the public market, things like spinoffs.

(17:06):
I look at Lennar's taxable spinoff of its property portfolio into a land bank, a perpetual land bank called Millrose, as an interesting kind of market-based restructuring. You look at what Becton Dickinson did with its instrument business in terms of a process where they had said, "Okay, we're going to spin it off, we're going to sell it, or we'll merge it with something." But they ended up doing a reverse Morris trust transaction. The pace of spinoffs, split-offs, RMTs, and restructurings actually makes it more interesting than just the business combinations. And that's probably around 800 billion of the market right now. Oh, God, I forgot the most interesting one: the Keurig Dr Pepper buy the coffee company, split the coffee company transaction. So you're seeing some really interesting transactions in which folks are saying, "Okay, I want the perfect portfolio."

(18:16):
"I can afford to get to the perfect portfolio. I'll buy some things, I'll combine them, and then I'll split off or spin off what I don't really want." I think that's the most interesting thing that's happening right now, which means that so many things that weren't on the table historically because, "Oh, we can't do that. We just bought it," or, "We've never thought about doing a taxable spinoff"—all of those things are back on the table and more interesting now.

Chana Schoenberger (18:40):
Okay. So if you could advise a client to buy anything right now, what would it be?

Christina Mohr (18:51):
Every client's different, so I don't have a great answer for that, but I think that this is the time... I'll go back to what I just said. Every company has a wishlist of what they'd like to own and what strategic moves they'd like to make. I think this is the time, once again, to dust off that wishlist, look at it hard, and understand if there's a way that you can pull it off based on the cost of capital, repackaging the assets, and thinking about other forms of co-investment and capital. Things that you might not have thought possible historically are probably possible in this market, given the confluence of good equity markets, good debt markets, a transactional regulatory regime, and corporate confidence. All of that seems to be lining up.

(19:58):
So if you want to try it, go for it.

Chana Schoenberger (20:03):
No, that makes perfect sense. I mean, as a journalist, I have a list of stories I would love to write if I could report them, if I could get the goods on them. I'm sure that CEOs all have a list of things they'd love to buy, right?

Christina Mohr (20:16):
Every company has its list, right? I mean, that's the trope of M&A new business. You're showing up to discover what people really want to do because you're probably not going to tell them something they don't know, but...

Chana Schoenberger (20:32):
So there are no new ideas in M&A?

Christina Mohr (20:33):
There are plenty of new ideas. I come up with a new one every day. That's what I tell everybody.

Chana Schoenberger (20:43):
Brand new ideas. So regulation, this question of deals getting approved more quickly, everything is sort of different now. The administration did a 180 on almost everything the last administration had said, which makes it a little confusing for CEOs and for the bankers who have to explain these things to them. So what should people know about the regulatory environment other than it's more permissive?

Christina Mohr (21:12):
I think that's what you should know—it's not across the board, but what we would observe is that by and large, transactions that don't have a reason... the transactions that should be cleared rapidly are getting cleared rapidly. The early termination really is happening. 190 early terminations in 10 months is pretty stunning. And by and large, there is a—I don't want to say transactional bias—but there is a willingness to try and understand what kind of remedies might solve concerns at the regulatory level and work through those. And to the extent to which there is an objection, to be transparent about that objection. You see staffs coming out with statements about why something was or wasn't approved. I think that's a very different environment than the one that we had for the prior administration.

Chana Schoenberger (22:26):
Okay. Makes a ton of sense. We have time for a question or two. Does anyone have... yes, right there. Have you the mic? I can hear.

Audience Member 1 (22:40):
Thank you. I'm curious to know, especially with some of the topics today around AI and technology capabilities, how are your clients thinking about using M&A to get capabilities in those spaces? So maybe not bank-to-bank M&A, but fintechs.

Christina Mohr (22:59):
Are you asking me who do I know that's done an acqui-hire? Because most of my clients have. No, I think that AI is driving a huge part of the business that is all about compute. And so the transactions we're seeing on the compute side are largely financing. There is some swapping among the data centers and some of the utilities and the like, so we are getting transactions around that. But by and large, that's a big financing theme. But AI itself, it's really about acquiring capabilities that then can be embedded in one's own operation. Capability sometimes means a company that has a capability, but it just as often means a person or a team of people who have developed a competence around a certain activity that can become part of the larger AI infrastructure of a company. So we're seeing it drive deals both on the infrastructure side and on the analytics side, but stay tuned.

(24:22):
I think this is at the very early days. For those of you who were around for the internet boom, you remember that there were some big deals, then there was a bit of a step pullback, and then there were big deals again. So I think we're in the beginning of a cycle and that over time you'll see it play out.

Chana Schoenberger (24:56):
Great. Okay. We can take another question.

Audience Member 2 (25:06):
Hi. Thanks a lot for sharing your incredible journey. My question is that you've been in deal-making ever since you began your career. What's that one deal that you're most proud of, if you are able to share, and why? And maybe one more which you're not so much, and why?

Christina Mohr (25:24):
Okay. This is like when your younger child looks at you and says, "Mommy, I'm your favorite, right?" All of your deals are great and I love all my deals and I love all the people who've done them. I don't really want to name names, but I'll tell you the one I'm proudest of. Like most women who work and have kids, someone puts me in charge of Thanksgiving every year because if you want something done—like a 15-pound raw turkey—ask someone who's busy. So it's Wednesday and you got to pull an all-nighter to get that thing on the table for Thursday. I'm in the beginning stages of my Thanksgiving all-nighter and I get a call from a client. Actually, he passed away, so I don't have to disguise his name by too much.

(26:26):
I'll disguise the situation a little bit. I get a call from a client who basically says, "Christina, I'm sitting here with my family and we were talking about what we were grateful for." And I said, "Yeah, we do that too. We typically wait until tomorrow after I actually get the turkey cooked, but sure, I'll spot you that one." And he said, "The story I just told my family is the story of what happened over the last two years." This executive thought he was going to be the CEO of his parent company and he got passed over for a much younger guy who was more attractive—all the kinds of reasons people usually get passed over. He ended up with the prize of being the head of a division. We ended up acquiring another company to add to that division, and another company to add to that division.

(27:25):
And then we ended up taking it public in a spectacular IPO and it ended up being worth more than the parent company. He said, "Only someone who really didn't get the joke would've believed that we could do this." I said, "Yeah, well, it's part of my charm because I don't get the joke." And he said, "But you believed in me. You believed that we could do this and I'm just calling to say thank you because it's made such a profound difference to me, to my family, to all of us, and I wouldn't be here without you." Very few people send thank you notes after your transactions. By the way, any of you who hire an investment banker, you might send them a thank you note sometime. But in any case, that transaction and that story stick with me. I've done deals where the stock has gone up a lot and deals where the stock's gone down a bit, but deals that change people's lives and change executives' lives in a way that they didn't even imagine—that is what I take away.

(28:33):
And in particular, I'm a little tiny person, how could I possibly change this big guy's life? He was 6'4" for God's sakes, but it happened. That is what I take away: that by sticking with your guns, by understanding the situation, and by refusing to say no, you can actually change someone's reality in a way that matters to them, their family, and their legacy.

(29:03):
Anyway.

Chana Schoenberger (29:04):
That's a great story. This is how I described the honorees of the Most Powerful Women in Banking recently: people who just don't take no for an answer.

Christina Mohr (29:13):
That's fair. The only reason we're here is because we are so counterdependent, we ignored the "nos" that we got at the beginning. But I think it's generational. These days everyone wants you to do this job. When some of us started, it was a little different.

Chana Schoenberger (29:35):
Yes. Things are quite different from when you started. Okay. One more question and then we're going to hand it over to the next group.

Audience Member 3 (29:54):
Thank you. That was fabulous.

Christina Mohr (29:57):
It's actually true.

Audience Member 3 (29:59):
You talked about loving the job and that's refreshing to hear. I want to ask, what would you change about the world of M&A that you've been in for the last many decades, if you could?

Christina Mohr (30:13):
That's an interesting question. I think that what I would change about it... oh, this is going to be controversial by the way, so I hope we're not being recorded.

Chana Schoenberger (30:37):
We are recording. See that big old camera over there?

Christina Mohr (30:40):
Now you tell me. But anyway, we spend a lot of time teaching people the numbers and the analysis. Without a doubt, you can't be helpful to a client without understanding all of the analysis and the strengths and weaknesses of the position and the value. We spend so much time on value, pro forma analysis, and value creation. What we don't spend enough time on is the real hard skill and soft skill of different ways to think about negotiations. I grew up in the Cambridge school in the 1970s and 1980s; it was all about "Getting to Yes." There was this notion that the way you negotiated anything was you started with some objective, understood the other side's objective, and made these little micro-moves to meet in the middle and get to a "yes" that everybody was equally unhappy with.

(31:56):
And then you have that kind of very aggressive, "Well, it's my way or the highway. I'll throw the keys on the table and walk out the door." That kind of very hyper-aggressive negotiating style.

(32:22):
There's an interesting book that some of you should come find me about later, titled "Never Split the Difference," which is all about a different form of negotiating style. It's more about understanding the other side's position and then explaining to them why we can't get there from here. We should spend more time teaching our younger people and reminding everybody that there are different ways to negotiate everything and that people have a natural style. Some people are natural data hogs, some people are natural pleasers, some people are naturally aggressive, and you probably need to shift your style a little bit for every one of those. That's the thing I wish we taught all of our people more systematically. It's something I wish I'd taken a class on every six months rather than randomly worrying about it when I thought I was getting in over my head. Anyway, thank you all.

Chana Schoenberger (33:39):
Thank you so much.