Magazine article American Banker

REPORTER'S NOTEBOOK: Bankers Say Cross-Industry Deals Getting Easier

Magazine article American Banker

REPORTER'S NOTEBOOK: Bankers Say Cross-Industry Deals Getting Easier

Article excerpt


Integrating mergers was a major focus of discussion during last week's gathering of about 100 top international bankers at the International Monetary Conference here.

During a panel discussion Monday, bankers said combinations of investment and commercial banks are getting easier to accomplish as the two industries become more alike and cultural clashes abate.

"It's easier to imagine a merger between a commercial and investment bank today," said Rainer E. Gut, chairman of Credit Suisse Group. The Zurich banking company was a pioneer of cross-industry mergers with its 1988 acquisition of New York investment bank First Boston Corp.

"Culture clashes are still there," Mr. Gut said of such unions. "But there is not as great a difference as 10 or 15 years ago."

Mr. Gut's fellow panelists included Rolf E. Breuer, chairman of Frankfurt-based Deutsche Bank, who just completed his $9 billion acquisition of another U.S. investment bank, Bankers Trust Corp.

Bankers Trust was itself a hybrid of the 96-year-old commercial bank plus the investment banks Alex. Brown of Baltimore, which it bought in 1997, and Natwest Markets in Europe, which it bought in 1998.

Panelists said recent mergers of investment and commercial banks have benefited from sometimes painful lessons.

"The real difference between these mergers now and back then was that the banks don't go into it unprepared," said Patrick Gillam, chairman of London-based Standard Chartered Bank.

Cultural issues need to be managed by the top executives on down, bankers said.

"There is skepticism of mergers of this size," said Verne G. Istock, chairman of Bank One Corp., which was created in last year's merger of Columbus-based Bank One and First Chicago NBD Corp.

"Some have gone very well, but there are some bodies along the highway."

Mr. Istock said bank mergers have run into trouble because managers have not addressed personnel issues swiftly, creating distractions that prevent integrations from getting done within a reasonable time. …

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