Germany's Deutsche Bank swept into Belgium yesterday in its European expansion drive, announcing it was buying the Belgian business of France's Credit Lyonnais for about one billion marks (#357m).
The deal, expected to be finalised in the first quarter of next year, is Deutsche's second big acquisition announced this week, after it said on Monday it was buying Bankers Trust Corp of the US for #6bn.
The takeover shows that Deutsche remains determined to grow in continental Europe, which will, in effect, constitute
its enlarged home market following the launch of the euro on
January 1.
Deutsche said it will merge its own Belgian business with that of Credit Lyonnais Belgium, which has 38 branches, a staff of 950, more than 186,000 customers and a balance sheet total of 24.1bn marks (#8.7bn).
News that the deal was imminent was leaked by banking sources on Tuesday.
The Belgian unit is one of several subsidiaries that state-owned Credit Lyonnais was obliged to sell in return for EU approval of past state aid.
''With this takeover, Deutsche Bank, in line with the group's overall strategy, is taking a further step in the direction of European expansion,'' Deutsche said in a statement.
Credit Lyonnais Belgium's name will be changed to Deutsche Bank, but it will retain its present management.
Chief executive Rolf Breuer stressed this week that Deutsche's takeover of Bankers Trust in no way diminished the bank's ability to fund expansion in its core
market, Europe.
He had even hinted that a European acquisition was imminent by saying, on Monday, that Deutsche would provide proof of its European growth plans in the coming days.
''We still want to expand in Europe and financing that is no problem for Deutsche,'' Breuer told Monday's news conference to outline the Bankers Trust purchase, which will make Deutsche the world's largest bank ahead of Union Bank of Switzerland.
Deutsche already has sizeable retail banking operations in Spain and Italy, where it is the largest foreign bank.
Breuer has made no secret of his ambition to establish a strong foothold in France as well, but has said Deutsche has made no progress there due to French reluctance to allow a foreign bank to buy a French one without a commensurate French acquisition abroad.
Deutsche said earlier this year that it could imagine taking a stake in Credit Lyonnais itself in the course of the French bank's privatisation. But Credit Lyonnais subsequently announced that such a move would not be
welcome.
Deutsche reportedly had to compete for Credit Lyonnais' Belgian business with Dresdner Bank, Germany's third largest bank, which has also said it plans acquisitions in the euro-zone.
Dresdner this year identified blank spots it wanted to fill in Belgium, the Netherlands and Austria.
Deutsche said yesterday that it would place particular emphasis on expanding Credit Lyonnais Belgium's direct banking business as well as its equities, bond and fund management business for retail clients.
In banking for business customers, Deutsche has said that it will expand the bank's position in trade finance and transaction products as well as in corporate finance.
''We are taking over a bank which has a good position in Belgium in the market for wealthy and wealth-creating customers,'' Deutsche management board member Tessen von Heydebreck said in the statement.
''We see considerable growth potential here for our business in Belgium.''
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