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Banking industry

Deutsche Bank to Acquire Bankers Trust in Record-Breaking $9.67 Billion Deal

Strategic Insights

— 2 min read

The Bankers Trust Corporation, the New York bank, has agreed to be acquired by German banking giant Deutsche Bank A.G. in a cash transaction valued at approximately $9.67 billion, creating the world's largest financial services concern. The deal, which requires resolution of certain legal and tax issues, has received preliminary approval from both companies' boards of directors and is expected to be finalized on Sunday. Deutsche Bank's chairman, Rolf Breuer, expressed optimism about the deal's success, stating that the company is working diligently to finalize all terms.

Key Takeaways:

  • The acquisition of Bankers Trust by Deutsche Bank will create the world's largest financial services concern, with over $800 billion in assets.
  • The deal, valued at approximately $9.67 billion, will involve Deutsche Bank spending about $1 billion on a one-time, pretax restructuring charge to account for the merger.
  • The transaction is expected to result in annual pretax cost savings of about $1 billion, largely through the elimination of low-level "back office" positions and layoffs of Bankers Trust employees in Europe and Deutsche Bank employees in the United States.
  • Deutsche Bank's chairman, Rolf Breuer, expressed optimism about the deal's success, stating that the company is working diligently to finalize all terms.
  • The acquisition will give Deutsche Bank a strong presence as a securities custodian, a business area that other companies had previously tried to convince Bankers Trust to sell.
  • Goldman, Sachs & Company is advising Deutsche Bank in the negotiations, while Morgan Stanley Dean Witter is advising Bankers Trust.

Statistics:

  • The deal is valued at approximately $9.67 billion.
  • The acquisition will create the world's largest financial services concern, with over $800 billion in assets.
  • Deutsche Bank expects to incur a one-time, pretax restructuring charge of about $1 billion early next year.
  • The deal is expected to result in annual pretax cost savings of about $1 billion.
  • Bankers Trust's shares rose more than 9% to $84.25 in trading yesterday on the New York Stock Exchange.

Sources:

  • "Over the past year, companies as diverse as the Bank of New York, Mellon Bank and the State Street Corporation approached the Bankers Trust Corporation, the New York bank, about buying portions of its business" (The New York Times, Undated)
  • "Yesterday, Deutsche confirmed that it was close to acquiring Bankers Trust for about $9.67 billion" (The New York Times, Undated)
  • "Bankers Trust's shares rocketed more than 9 percent, to $84.25, in trading yesterday on the New York Stock Exchange" (The New York Times, Undated)
  • "Deutsche Bank's chairman, Rolf Breuer, expressed optimism about the deal's success, stating that the company is working diligently to finalize all terms" (The New York Times, Undated)
  • "The New York law firm of Sullivan & Cromwell is also advising Bankers Trust" (The New York Times, Undated)

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