FD, Brunswick steer German deal

FD and Brunswick are working on opposing sides of the biggest European M&A deal in the financial services industry this year.

Commerzbank: takeover of Dresdner
Commerzbank: takeover of Dresdner

Commerzbank’s purchase of Dresdner for €8.8bn may be an all-German affair, but the impact of the deal highlights the importance of UK corporate communications in the financial sector, according to insiders.

Commerzbank’s in-house comms team is being aided by Hering Schuppener Consulting in Germany, and FD internationally.

FD has an ongoing relationship with Commerzbank, having won its retained business from Maitland in 2006.

On the other side of the deal, the M&A department at Allianz Insurance – the current owner of Dresdner – is being advised by Brunswick on a project basis.

As the deal reaches its conclusion, Commerzbank and Dresdner will have to oversee the integration of their investment banking operations – with Commerzbank Corporate and Markets and Dresdner Kleinwort being long-established names in the UK’s financial centre.

The major challenge facing the UK comms operation on the deal would initially appear to be the significant job losses the takeover will entail. Commerzbank plans to shed approximately 1,000 jobs in London, with around 2,000 of Dresdner Kleinwort’s 5,500 global staff employed in the UK.

The UK media have already highlighted job losses, bringing them into the wider narrative of more general financial troubles in the City. Coming on the heels of PR difficulties concerning several leading banks and their respective rights issues, it is not an easy time to communicate the mutual benefits of the deal, insiders observed.

One source close to the deal noted that the press coverage of the takeover had, in some areas, been ‘sensationalistic’ and that the communications strategy around the takeover would inevitably include an element of ‘hysteria restraint’.

But others said Commerzbank would not be too disappointed to see the job cuts heavily covered, given that it is a prominent message the company needs to spread.

One adviser on the deal said: ‘Commerzbank will want people to understand that the financial rationale for the deal is the cost savings that it is going to make from the overlap in the workforce. It is a tough message for the workforce, but a necessary one for the deal.’ Another City source said: ‘Job cuts are bad news on the BBC, but potentially good news in the FT.’

How I see it

Mark Knight Director, Broadgate

The newspapers concentrated on the job-cuts angle, rather than the real story of how the combined force would be able to take on Deutsche Bank.

There are not many profitable banks in Germany and consolidation has been needed for some time, but
the story was somehow written by journalists as being all about thousands of bankers getting laid off in London.

Cost savings and redundancies are always big issues for journalists, but unfortunately the banks involved did not clearly enough convey the message of the benefits the combined force would bring to London.

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