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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