Deutsche ? Dresdner Bank (Merger Failure)
The merger that was announced on march 7, 2000 between Deutsche Bank and Dresdner Bank, Germany’s largest and the third largest bank respectively was considered as Germany’s response to increasingly tough competition markets.
The merger was to create the most powerful banking group in the world with the balance sheet total of nearly 2.5 trillion marks and a stock market value around 150 billion marks. This would put the merged bank for ahead of the second largest banking group, U.S. based citigroup, with a balance sheet total amounting to 1.2 trillion marks and also in front of the planned Japanese book mergers of Sumitomo and Sukura Bank with 1.7 trillion marks as the balance sheet total.
The new banking group intended to spin off its retail banking which was not making much profit in both the banks and costly, extensive network of bank branches associated with it.
The merged bank was to retain the name Deutsche Bank but adopted the Dresdner Bank’s green corporate color in its logo. The future core business lines of the new merged Bank included investment Banking, asset management, where the new banking group was hoped to outside the traditionally dominant Swiss Bank, Security and loan banking and finally financially corporate clients ranging from major industrial corporation to the mid-scale companies.
With this kind of merger, the new bank would have reached the no.1 position of the US and create new dimensions of aggressiveness in the international mergers.
But barely 2 months after announcing their agreement to form the largest bank in the world, negotiations for a merger between Deutsche and Dresdner Bank failed on April 5, 2000.
The main issue of the failure was ...