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A Thing Marks and Cents
Marks and Cents

 

As we told you in the May 1998 issue of GSQ if American banks don't get on the ball in talking Internet and traditional business, foreign banks will. Well, it's startingówith the biggest merger ever.

Germany's Deutsche Bank and America's Bankers Trust are in merger negotiations. If the deal goes through, it will be the largest foreign takeover ever of an U.S. financial firm. The proposed merger will create the world's biggest financial services company, with assets of about $850 billion.

Deutsche Bank is Europe's second-largest bank and Germany's largest bank, with $675 billion in assets. Bankers Trust ($176 billion in assets) is our nation's eight-largest bank. Banker's, while strong in other areas, doesn't have a consumer banking business so it has been vulnerable to Wall Street losses.

The deal, which is valued at anywhere from $9.2 to $10 billion depending on who you talk to, is actually more than what Bankers Trust is worth. But, Deutsche Bank has had a strategy to extend operations into North America and felt that this is the time to do it.

Deutsche Bank will cut 5,500 jobs, mostly in New York and London. The takeover is expected to be finalized in next month.

 

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