Dresdner to follow Deutsche in US buy

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The Independent Online
DRESDNER BANK chief executive Bernhard Walter gave a fresh twist to hopes of further consolidation on Wall Street when he said yesterday that the bank is ready to follow its rival Deutsche into a big US deal.

Mr Walter, who was speaking on German radio as Deutsche confirmed it was close to agreeing a $9bn takeover of America's Bankers Trust, said that a large merger was "a very clear option".

Dresdner, Germany's third largest bank, was in talks earlier this year with PaineWebber, another US securities firm, although its interest more recently has been closer to home where it is said to be keen to merge with Societe Generale, the French bank.

The merger news powered shares in New York close to a new record with the Dow Jones up 173.27 points, at 9332.82, at lunchtime. Brokerage firms PaineWebber, Donaldson, Lufkin Jenrette, and Lehman Brothers, all soared by more than 10 per cent.

In a joint statement issued to coincide with the start of New York share trading, Deutsche and Bankers Trust said that it was hoped that work on the deal would be completed in time to receive final approval at separate board meetings scheduled for this coming Sunday.

Deutsche's management board chairman Rolf Breuer, who flew to New York for talks with his opposite number Frank Newman over the weekend, said yesterday that the merger with Bankers Trust would create " a truly compelling financial services company.".

However, staff at the City offices of both BT Alex Brown, Bankers Trust's securities operations, and Deutsche Bank were yesterday worried about their jobs.

BT's 2,400 London staff fear a repeat of the blood bath that followed UBS' merger with Warburg.

Given the concerns that surfaced during the recent financial markets turmoil about Bankers Trust's financial strength, Deutsche is understood to be keen to ensure that the due diligence process has been thorough before approving the deal.

Another key issue that has yet to be resolved concerns the management structure.

Deutsche may model the business on Credit Suisse First Boston, which is owned by Swiss bank Credit Suisse but run from Wall Street.