Sorry links do not work, here is article.
U.S. financial reforms open doors
European firms eye U.S. targets
By Liza Roberts, CBS MarketWatch
Last Update: 4:35 AM ET Oct 28, 1999 NewsWatch
LONDON (CBS.MW) -- As the U.S. Congress prepares to sweep away Depression-era financial legislation, paving the way for banks, insurers, and securities firms to enter each other's businesses, some European firms are eyeing the U.S. marketplace with new interest.
CBS MarketWatch Columns
Updated:
01/18/2000 6:11:24 PM ET
U.S. investors and consumer groups have long predicted a wave of domestic mergers and alliances would follow the repeal of the Glass-Steagall Act (see full story). What they may not have counted on was fresh interest from abroad.
For European companies on the prowl, perhaps more important than the breakdown of barriers between U.S. industries is the rush to scoop up the right properties before someone else does. Speed it up "European companies who have ambitions in this area and who haven't already made acquisitions will be forced to accelerate the search
process," said Bill Howard, banking analyst at Fox-Pitt, Kelton in London.
European insurers are the most likely would-be buyers, Howard said, citing ING Groep NV (ING: news, msgs) of the Netherlands as a likely shopper for a U.S. life insurer. Giant Dutch insurer Aegon NV (AEG: news, msgs), fresh from its $10.8 billion acquisition of Transamerica Corp. (TA: news, msgs), has also not stopped shopping in the U.S., and
may buy some smaller entities, Howard said. And Allianz AG (AZ: news, msgs) could be in the market for a property/casualty business, he said. In fact, these foreign players may be more interested in U.S. insurance
properties than are their American counterparts. "There's a pretty small scope of potential acquirers in the U.S.," Howard said. And the market could be prime. "I think you'll really see more sellers out there -- willing sellers of their businesses, at good prices -- when this (legislation) passes," he said.
Banks stick to knitting The big European commercial and investment banks are not as likely to seek out American purchases, however, analysts said. For one thing, most
are in the process of building up their domestic businesses to compete in a global marketplace.
"Other than the glaring example we've had so far of a Europe-U.S. deal, which is Deutsche Bank's acquisition of Banker's Trust, European banking isn't advanced enough even for European cross-border deals. We need the formation of national champions first," said Jim Woodsmith, bank analyst
at Greig Middleton in London. Also, many of Europe's big banks are in digestion mode as it is. Deutsche Bank AG (DTBKY: news, msgs) is swallowing Bankers Trust; HSBC
Holdings Inc. (HBC: news, msgs) is gobbling up Republic New York; Banque Nationale de Paris SA is buying Paribas SA.
And the tussle between National Westminster Bank PLC (NW: news, msgs) and Bank of Scotland PLC is nowhere near over, and could end up involving Abbey National PLC, ING, or ABN Amro Holding NV (ABN: news, msgs), analysts say.
Nevertheless, some say European banks have something more to bring to the table in the U.S.: "Clearly there is a stronger tradition of bank-assurance or conglomerate-style financial institutions in Europe than there is in the U.S. -- that expertise could give some competitive advantage," said Richard Dale, professor of international banking at the
Southampton University in Britain.
But others just don't see why Glass-Steagall reform has anything to do with whether or not European banks troll for U.S. booty. "When it comes to the headline deal for a big bulge-bracket broker-dealer, that deal's been possible for some years," said Ian McEwan, bank analyst at Lehman Brothers in London. "It could happen, but I don't think this suddenly changes the likelihood of it."
Thanks to Bruceski for in IN-DEPT DD who posted this article on RB post 3690. |
