Deutsche Bank AG Buys Zurich Scudder Investments For US$2.5 Billion

by Carla Johnson, Investors Offshore.com

25 September 2001

Deutsche Bank AG has announced that it intends to buy the asset management arm of Zurich Financial Services, Zurich Scudder Investments, for US$2.5 billion. With Scudder's asset base of US$350 billion the agreement will see Deutsche Bank become the fourth largest asset manager in the world with in excess of euro 1 trillion in assets under management.

As part of the deal Zurich, the third largest insurer in Europe after Allianz and AXA, will receive Deutsche Bank's insurance operations in Italy, Spain and Portugal and 75.9 per cent of Deutsche Bank's insurance holdings, Versicherungsholding der Deutschen Bank AG (VHDB), which includes the Deutscher Herold Group, the Bonnfinanz investment advisory service and Bonndata.

Threadneedle was not included in the deal and will be retained by Zurich which considers Threadneedle an integral part of Zurich's UK-based insurance business.

In a statement from Deutsche Bank, Rolf E Breuer, chairman of the Bank's corporate and investment bank and private clients and asset management executive committee (PCAM), stated: 'I am pleased that, in Zurich, we have succeeded in finding a strong partner in the insurance industry in Europe. Deutsche Bank is thus focussing on its strengths in the production and sale of bank products and bank services. At the same time, our customers can also benefit from all the advantages of an integreated bancassurance offering.'

Commenting on the VHDB deal, Rolf Huppi chairman and ceo of Zurich Group, said: 'This agreement enables us to fill a strategic gap in our presence in Continental Europe. We will significantly improve Zurich's position in our core insurance business by increasing our presence and penetration in the fast-growing European life insurance sector ... While the immediate benefits to Zurich are substantial, we look forward to the long-term opportunities offered by the extensive marketing, distribution and product development aspects of our partnership with Deutsche Bank.'

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