Best bank – Deutsche Bank
Best debt house – Deutsche Bank
Best equities house – Deutsche Bank
Best M&A house – Morgan Stanley
Best local partner – Sal Oppenheim
Choosing a best bank in Germany is a no-brainer. Among the three privately owned banks – now that Dresdner has become part of Allianz – only Deutsche Bank comes close to making the grade. Hypovereinsbank and Commerzbank continue to struggle with huge non-performing loans and the lack of a coherent strategy. Not so Deutsche which, under the auspices of Joesf Ackermann, has been cleaning up its act and cutting costs, making it by far the Germany’s pre-eminent bank. It provides German companies with the full range of investment banking and commercial bank products as well as having a highly regarded private-client and asset-management business. This year Deutsche has been refocusing away from the troubled domestic mid-cap sector, surely a smart move.
Deutsche’s prowess in debt in its home market remains untouchable. It dominates the league tables, with over 12% of total German business under its belt for the past year. In every type of business from corporates, to banks, to local authorities and government bonds, it stands out. Among successes this year was Deutsche Post’s e1.5 billion transaction in September, comprising five-year and 10-year tranches of equal size. Deutsche was joint bookrunner with CSFB and Morgan Stanley. More recently, Henkel attracted massive demand for its planned e750 million, 10-year debut issue and was able to upsize it to e1 billion as a result. Deutsche continues to do the greatest volume of business with German state-bank KfW, including two e5 billion benchmark deals over the past year. In the loans market it maintains a market share of close to 30% across all types of financings from acquisition, leveraged buyout, project finance to real estate. It was one of three bookrunners on Volkswagen’s e15 billion facility and in December raised the same amount for E.ON. These transactions marked new highs in the European syndicated loan market. In May, it proved equally capable of raising money in the US for European issuers with a $13 billion deal for DaimlerChrysler.
Nowhere is Deutsche Bank’s growing presence in equities more obvious than in its home market. Though rival Goldman Sachs scores points on both the Allianz rights issue and the e732 million deal for T-Online, it can’t top Deutsche Bank in terms of the number and variety of deals as well as its secondary market strength. Among the most significant deals it managed this year was a e398 million capital increase for Deutsche Börse, placed at a 0.6% discount to the market price, and a e1.6 billion accelerated bookbuild for Munich Re, the largest secondary offering in Germany for over two years. In equity derivatives, Deutsche is the largest trader in the German warrants market and Xavex, its online trading system, has helped bolster its domestic retail derivatives business.
Morgan Stanley’s M&A practice has had an excellent year in Germany, traditionally one of Europe’s more active M&A markets. In May, it was sole adviser – a hotly contested role – to RAG on its acquisition of Degussa, creating a e11 billion company and the simultaneous sale of a 40% stake in Ruhrgas to E.ON. The latter part of the transaction was achieved via an asset swap. Morgan Stanley then worked with E.ON on an opportunistic purchase by auction of TXU Europe, which had been put into bankruptcy by parent company TXU. The deal was done on a short time scale, with just six days to complete due diligence and determine the correct valuation. Morgan Stanley also helped Siemens structure the sale of seven non-core businesses to Kohlberg Kravis Roberts.
Among the smaller investment banks in Germany, Sal Oppenheim has the edge, working on several important transactions in the past year. In public-sector finance, an area riddled with political complications and hardly renowned for rapid consolidation, it worked with Landesbank Schleswig-Holstein on its merger with Hamburgische Landesbank. It also worked on a rare deal between two Neuer Markt companies when it advised Rhein Biotech on its acquisition by Berna Biotech. Another high-profile mandate was for EQT, which Sal Oppenheim helped to acquire Haarmann & Reimer.
