Deutsche Bank said on Monday that it had agreed to buy Zurich Financial Services' United States fund unit, Scudder, in a $2.5 billion (SFr4 billion) deal which catapults the German bank into the top global ranks of asset managers.This content was published on September 24, 2001 - 10:34
The transaction will see Deutsche abandon the insurance business and allow Zurich Financial Services to get rid of its under-performing US fund business, which it bought in 1995. Analysts say the partnership has been plagued by integration troubles from the beginning.
Deutsche, Germany's largest bank, said it would swap 75.9 per cent of its insurance holdings, including its insurance unit, Deutsche Herold and its Bonfinanz investment advisory arm, for Scudder, which has an asset base of $350 billion.
Zurich Financial, Europe's third largest insurer, expects $700 million in net proceeds to flow into the group as a result of the deal. Many analysts are disappointed by the estimate and were hoping for a bigger cash injection to ease the company's debt burden and restore confidence in the firm.
Key to the deal is an agreement granting the two companies reciprocal access to their retail branches.
Shareholders in both companies welcomed the news that the transaction had finally been agreed. It was delayed due to the attacks on the United States almost two weeks ago.
swissinfo with agencies
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