| Headline: The failed deals Source: Euromoney Date: February 2001 Author: Antony Currie Thus far, two mergers in Singapore’s Financial sector have failed to go through, and several cross-border ventures have gone awry. One merger hardly got past the rumour stage. Overseas Chinese Banking Corporation and Overseas Union Bank apparently explored a possible merger towards the end of 1999, calling off talks early in 2000. The banks’ CEOs, Alex Au and Peter Seah, both professional bankers (which means not family members), apparently could not agree on terms for either price or control. Neither of the banks sees a good reason to merge, beyond cost-cutting and pleasing the government. “I think the rumoured deal did not eventually take place for several reasons,” says Roger Lum, banks analyst at CSFB. “They share many of the same customers, so there would be little to gain in terms of new customers; then there is the question of who would run the bank, and who would suffer the bigger job losses, that is, the ego got in the way. OUB management also seem to conclude that the only real benefit would be a one-off cost-cutting. We would add that an additional significant benefit would have been a larger and stronger Malaysian franchise when both their networks are combined, assuming the Malaysian authorities wouldn’t oppose it.” |