Deutsche Bank AG announced today the acquisition of New York-based Bankers Trust Corp. in a $10.1 billion deal that will create the world's largest financial institution, with assets of more than $800 billion.
Deutsche Bank offered Bankers Trust shareholders $93 a share to seal one of the largest takeovers of a U.S. financial institution by a foreign bank. The boards of both banks approved the offer Sunday.
The deal, merging Germany's largest bank, with assets of $675 billion, with Bankers Trust, the eighth-largest U.S. bank, with $156 billion in assets, is expected to close by next May.
The combined bank would surpass both current No. 1 UBS AG of Switzerland and the recently formed Citigroup Inc., the largest U.S. financial services company.
The merger will result in 5,500 layoffs, mostly in New York and London, Deutsche Bank chairman Wolf Breuer said during a news conference. He said not all of the lost jobs would be at Bankers Trust.
Deutsche Bank said the deal would be financed partly with a $2.35 billion capital increase and a one-time $1 billion restructuring charge for personnel.
Deutsche Bank acknowledged that the deal was worth more than Bankers Trust's assets and said it would make annual goodwill payments of $370 million over 15 years.
The merger must be approved by both New York state and U.S. federal banking regulators.
Soros still worried about recession
NEW YORK (AP) -- Billionaire financier George Soros believes that despite the recent upswing in world markets, the global economy could slip into a recession in the next couple of years, Newsweek reported.
Though U.S. stock markets have regained momentum and are now at all-time highs, "we are still in a bear market, and the previous lows will be retested, let's say, next year," Soros told Newsweek in the issue due out on newsstands today.
The near-collapse of hedge fund Long-Term Capital Management LP nearly drove the market to a meltdown, said Soros. It was staved off by a rescue package brokered by the Federal Reserve, as well as subsequent interest rate cuts by the Fed that injected liquidity into the markets, he added.
Still, that won't be enough, Soros said. The United States is in the midst of a "fairly mature boom" and faces increasing cost pressures. Japan remains in recession, and Brazil likely will follow suit, despite a recent global aid package of $41.5 billion, he added.
FedEx, Nippon Express plan alliance
TOKYO (AP) -- Japan's Nippon Express Co. and Federal Express Corp. have agreed to form a wide-ranging alliance in international delivery services, a news report said Sunday.
Cooperation will begin in December when Nippon Express, Japan's largest delivery company, starts using FedEx's international delivery service, the Nihon Keizai newspaper said, quoting unidentified company sources.
The alliance is expected to include joint use of parcel collection points and other facilities around the world. FedEx, the second-largest transport company in the United States, and Nippon Express also will share information systems to track cargo deliveries, the paper said.
FedEx, which has its own network in Tokyo, Osaka and other major Japanese cities, will contract out work to Nippon Express in areas not covered by its network.
This week in business
Here are the major business and economic events scheduled for this week:
Tuesday -- Chrysler, Toyota and Honda will report November auto sales; the National Association of Purchasing Management will release its business survey for November; the Conference Board will report leading indicators for October, and the Commerce Department will announce construction spending for October.
Wednesday -- Home sales data for October will be reported by the Commerce Department.
Thursday -- GM and Ford will report November auto sales; the nation's retailers will announce their sales figures for November; the Labor Department will report on third-quarter revised productivity, and Freddie Mac will release weekly mortgage rates.
Friday -- The Labor Department will report unemployment figures for November, and the Commerce Department will release factory orders for October.