It took Bayerische Vereinsbank's chief executive Albrecht Schmidt an age to gain the politicians' approval for a major bank merger. It eventually turned out to be with Bayerische Hypo-Bank. Part of the time was also taken up with concocting a plausible strategy for the merged bank - which would be the second-largest in Europe, persuading his arch-rival of the benefits and finally devising a way to avoid punitive capital-gains taxation on the deal.
Schmidt had been watching the situation carefully, but it was Deutsche Bank that made the first overt move when in July 1996 it revealed that it had built up a stake of over 5% in Vereinsbank. "It was unexpected and too early," says Schmidt, "because our plans weren't sufficiently advanced to respond." But he skilfully made use of the takeover speculation, which pushed up his bank's share price. Some observers, such as WestLB banking analyst Stefan Ermisch, even suggest that the rumours were fuelled "from Munich boardrooms" for that purpose.
Schmidt had another reason to be grateful to Deutsche. The intransigence of the German establishment, rather than lack of energy on his part, had caused his scheme to limp along before that day last summer.