Word: europeanize
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Dates: during 1990-1999
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...surprising that many of the new deals have an American feel: Europe's latest merger boom is being shaped by armies of pinstriped investment bankers jetting in from Wall Street. In fact, two banks based in New York City, Morgan Stanley and Goldman Sachs, overtook their European rivals for the first time in 1998 and became the top two advisers for takeovers in Europe in terms of the value of deals they helped bring about, according to Securities Data/Thomson Financial. "I believe there's going to be a lot more hostile activity," predicts Wilder Fulford, a managing director for mergers...
...advent of the euro has further heightened competition by eliminating the currency risk for investors, so that French mutual funds can safely invest, for example, in German companies for the first time. But another important effect of the same development is that European companies are all coming under increased pressure to improve their share performance for international shareholders regardless of local circumstances--even those that don't face global competition. "There's tremendous pressure from institutional investors who have seen the positive effects of shareholder power in the U.S. and are demanding similar moves in Europe," says Manfred Kets...
...important aspect of the recent shuffling is that nearly all the mergers have been domestic corporate marriages rather than cross-border European takeovers, which had been expected to proliferate when the euro was introduced in financial transactions in January. The main reason is efficiency: it is becoming obvious that domestic mergers offer big commercial banks a fast way to reduce expenses before they take the more uncharted jump outside national borders. "There's a preference to start with domestic mergers first because they offer the quickest way to reduce excess capacity by cutting jobs," says Hendrikus Blommestein, acting head...
...third reason for bulking up, according to Francesco Giavazzi, a professor at Milan's prestigious Bocconi business school, is that corporate size really does matter in banking, especially since the biggest banks are turning into one-stop service centers. According to Giavazzi, European banks are starting to follow another American model by replacing their traditional business of lending money with such financial services as asset management. "Being good is not good enough in asset management," Giavazzi says. "A bank has to be the best to attract customers, and that requires technology and highly trained personnel, which all cost money...
Size is so important that the prospect of creating a "champion of the European banking sector" prompted Banque Nationale de Paris to attempt to outmaneuver its rivals with a dramatic $37.6 billion offer to buy both Societe Generale and Paribas once their intended merger was announced, further jolting the French markets. If the BNP takeover ever goes through, it will create a bank with nearly $1 trillion in assets--Europe's largest--and give it an edge over the top U.S. bank, Citigroup, which currently has assets of $668.6 billion...