Setting out the details of their definitive merger agreement, Deutsche Bank and Bankers Trust Corp. said Monday that they expect to lay off 5,500 employees, take $1 billion in restructuring charges, and end up with $1 billion of annual cost savings by 2001.

Speaking a day after the $10.1 billion deal won formal board approvals, Deutsche Bank chairman Rolf-Ernst Breuer said the layoffs would be concentrated in London and New York, where the companies have substantial overlapping operations.

The job eliminations would add up to 5.7% of the combined work force, split evenly among global markets, global equities, and information technology and operations functions.

Bankers Trust is to be folded into Deutsche Bank's global corporate and investment banking operations, with the New York bank's chairman, Frank N. Newman, staying on as co-manager of global corporate and investment banking and chairman and chief executive officer of the U.S. bank.

Mr. Newman would also join the board of the German bank.

He and Mr. Breuer, speaking at a morning press conference in Frankfurt, said the combination would create a formidable competitor for American and European rivals and would pave the way for further expansion.

Mr. Breuer said the acquisition "underpins our leadership positions."

Deutsche Bank would have $834 billion of total assets, more than any other banking company. It would gain a strong foothold in U.S. capital markets and bolster its U.S. and European market positions in underwriting, research, mergers and acquisitions advisory, securities processing, and asset management, Mr. Breuer said.

"We want a trans-Atlantic presence, especially because our customers in Europe expect it," he said. "Bankers Trust is a platform on which we shall build" in the United States.

One-third of the new company's earnings would come from the United States, Mr. Breuer said. He projected that by 2001, earnings per share would be up 10% to 15% and return on equity would hit 26%.

Mr. Newman said Bankers Trust, while scaling back in emerging markets after suffering a $488 million loss in the third quarter, has been looking to expand in Europe and Deutsche Bank can help fill that bill. In April, Bankers Trust bought the European equity operations of Natwest Group of London.

Mr. Breuer did not close off the possibility of further acquisitions. Germany's largest bank has focused intently on continental Europe in recent months, analysts said. Mr. Breuer said at the press conference that the Bankers Trust deal would not interfere with those plans, which include acquisitions.

"Expansion in Europe is still in the offing," he said. The acquisition "does not impair that policy."

Deutsche Bank had been rumored for months to be hunting for a U.S. investment bank. In addition to Bankers Trust, the considerably larger J.P. Morgan & Co. was said to be a target. Mr. Breuer said, however, that Bankers Trust was his first choice.

"We never looked for a bulge-bracket firm, because that would have meant abandoning the identity of this bank," he said. "Bankers Trust was the first and best choice."

Both Mr. Breuer and Mr. Newman said their combination had "substantial synergies," though few of their businesses overlap. Deutsche Bank has long catered to large European corporations; Bankers Trust focuses on non- investment-grade U.S. companies.

Analysts have said the deal presents some thorny integration issues, particularly given the track record of other European banks that have sought out U.S. investment banking partners. For example, Credit Suisse took several years to integrate First Boston, which the Swiss bank acquired in the late 1980s.

"The challenge will be to blend the cultures and keep the people at the bank," said Ronald Mandle, an analyst at Sanford Bernstein & Co.

A $400 million fund has been earmarked for incentive pay to retain key executives, the companies said.

Mr. Breuer and Mr. Newman acknowledged the considerable cultural issues. "This transaction has no precedent," Mr. Breuer said. "We must now set a new standard."

The announcement Monday came a week after the companies confirmed they were in discussions-an admission that followed persistent speculation and press reports.

As in last week's disclosure, the deal was valued at $93 per Bankers Trust share. It is to be paid in cash, with Deutsche Bank increasing its capital by about $2.3 billion to cover part of the price.

The companies said their completion date is in May, pending the approval of U.S. and European regulators. Mr. Breuer said he had received assurances that U.S. regulators would expedite the process.

David Berry, research director of Keefe, Bruyette & Woods Inc., said the restructuring charge and layoff projection were slightly greater than expected but "not unreasonable."

Corporate and investment banking will be co-managed by Mr. Newman and Josef Ackermann, a Deutsche Bank board member who has had that responsibility since a January reorganization. Ronaldo Schmitz, his current counterpart in the investment bank, will remain on the board of the holding company and the investment bank until 2000, the bank said.

Mr. Newman and Mr. Ackermann will also oversee an investment banking committee set up to tackle integration issues.

Bankers Trust members include Mary Cirillo, head of global institutional services, which includes global custody; Yves C. de Balmann and Mayo A. Shattuck 3d, the co-chairmen of BT Alex. Brown, who will continue to run that business; and James E. Virtue, head of corporate finance.

Deutsche Bank members include Edson Mitchell, head of global debt trading, and Michael Phillip, head of global equities.

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