Bankers Trust is gone. Long live Deutsche Bank.
That is the attitude taken by Rolf E. Breuer, chairman of Deutsche Bank, which last week completed its $9 billion takeover of Bankers Trust Corp. And he implied that he will take a similar stance in other big acquisitions.
Mr. Breuer, who heads what is now the world's largest bank, with assets of $821 billion, told reporters during the International Monetary Conference this week that for an acquisition to be successful it must be made absolutely clear that the acquirer is the boss.
He applied that thinking to New York-based Bankers Trust, the eighth- largest U.S. banking company, with assets of $127 billion as of March 31. For Bankers Trust, he stated, "there is no independence."
Exuding confidence at a press briefing on Monday, Mr. Breuer spoke bluntly but in a relaxed manner. Legs crossed as he sat in a chair, he fielded an array of questions, leavening his remarks with humor.
Despite the amiability, Mr. Breuer said Deutsche Bank will expand further with the same take-no-prisoners approach. The Frankfurt institution would consider any acquisition that it believes attractive, he said.
Mr. Breuer specifically said that Deutsche Bank is eager to strengthen its equity business in Japan, where he views the economy as improving.
In the United States, Mr. Breuer expects to build on the base Deutsche Bank now has, primarily by hiring teams of investment bankers rather than through outright acquisitions.
The Deutsche Bank chief spoke highly of Alex. Brown & Co., the Maryland- based investment bank owned by Bankers Trust, now called Deutsche Alex. Brown & Co.
Although the unit will be directed from Frankfurt, Alex. Brown will contribute significantly to the creation of Deutsche Bank's new culture, Mr. Breuer said. Deutsche Bank wants to import Alex. Brown's entrepreneurial spirit to Europe "as a shot in the arm" to its operations there.
The U.S. investment bank has a respectable presence among firms that provide mergers-and-acquisitions advice to middle-market companies, Mr. Breuer said. He wants to expand that capability to large-scale transactions both domestically and in Europe.
"Alex. Brown is a fantastic franchise, but not for megadeals," Mr. Breuer said. "We cannot continue to say we only do middle-market deals. Our customers expect us to do megadeals."
"We do not have aspirations to replace the bulge-bracket firms, but we want to be included," he added.
Aside from seeking to do bigger deals, when asked what M&A advisory businesses Deutsche Bank would like to beef up, Mr. Breuer cited financial services and natural resources. He acknowledged that financial services advisory can be hard for a banking company to crack, but natural resources is seen as a strong fit. "Thanks to our presence in Canada and Australia, we bring a lot to the table," he said.
The emphasis he places on quickly imposing Deutsche Bank's authority over acquisitions comes from bitter experience, particularly its attempt to digest Morgan Grenfell & Co., the London investment bank acquired in 1989.
Former Morgan Grenfell executives say that a five-year tug-of-war ensued with the new parent over how much independence Morgan Grenfell would get. This friction and lack of leadership caused many key bankers to quit, leaving Deutsche Bank with little for the investment it made.
Recalling that experience, Mr. Breuer said that in acquisitions "resistance is natural," and he vowed not to make the same mistake again. "This time we know what we we're doing," he said.