Deutsche Bank, West Germany's biggest bank, stepped in today as Morgan Grenfell Group PLC's "white knight," agreeing to pay $1.47 billion to acquire the British investment bank.
Share analysts said the deal with Deutsche Bank AG at $8.52 a share looked likely to fend off an unwelcome approach from French-based Banque Indosuez, which has built up a 14.9% stake in Morgan.
Deutsche has been shopping around Europe, buying banks in Italy, Spain and Austria ahead of the single market planned in the European Community from 1992. The acquisition of Morgan Grenfell gives Deutsche a springboard for expanding its business in London.
Morgan became a high-flyer during a 1985-86 takeover boom but was hit by alleged involvement in a scandal surrounding brewer Guinness's takeover of drinks group Distillers. The world stock market crash of October, 1987, further weakened Morgan.