To Wall Street, Alex. Brown & Sons' pending sale to Bankers Trust New York Corp. was an encouraging sign of growing harmony between investment and commercial banks.
But to the venerable firm's hometown of Baltimore, it was another painful blow to civic pride.
Since 1987, some of its leading corporations have disappeared. MNC Financial Inc., Baltimore Bancorp, and Loyola Capital Corp. were gobbled up by outsiders. Nonfinancial companies such as CSX Corp., Noxell Corp., and Sweetheart Cup Co. have also found new owners or new homes.
But Alex. Brown & Sons-part of the Baltimore landscape since 1800, when Alexander Brown, an Irish-born cotton exporter, established the firm to finance his trade-seemed like a stalwart of independence. That made the April 7 merger announcement particularly poignant for some.
"I think it's just sad. It's upsetting to see," said one member of the Brown family, who spoke with an American Banker reporter during a chance encounter days after the announcement.
Adding insult to injury, the sale comes as Baltimore prepares to celebrate its bicentennial this year.
"It's a little unnerving to hit this 200-year mark and see corporations like Alex. Brown going away, when they were the foundation of the cultural, social, and economic life of the city," said John H. Ott, chairman of the Chamber of Commerce. The firm made its name in 1827 by financing the Baltimore & Ohio Railroad, and has since been involved with hundreds of initial public offerings for such elite companies as Microsoft Corp.
Mr. Ott and others worried that loss of local ownership would mean job cuts and a decline in charitable giving. (Officials of Bankers Trust and Alex. Brown said only 100 out of 2,700 jobs are expected to be eliminated.)
The only Brown family member still active in the firm-chairman emeritus Ben Griswold 4th, a seventh-generation descendant of the founder-said his family is "very, very positive on the transaction." He stressed that the benefits of the merger and the "power of the idea" should transcend any concerns, and said charitable giving won't be hampered.
But others worry Baltimore's reputation as a business center is heading down a slippery slope. "We all know it's a period of mergers and acquisitions, so it's not a shock," said Carl W. Stearn, chairman of Provident Bankshares, one of two remaining locally based large banks. "But the question is: What happens next?"