Klaus-Peter Müller’s exquisite timing
Commerzbank was a fading but still powerful force. Eurohypo was establishing a strong foothold in real estate. Their marriage came as a surprise, but the firms’ combined talents are shaking up the real estate investment banking market. Phil Moore reports.
When Commerzbank announced its intention to acquire Eurohypo in late 2005, the bank’s share price shot up. In part, this was because many equity investors thought Commerzbank had been able to buy Eurohypo for a song.
But even more important was the perception that at a stroke Commerzbank had bought itself a front-row seat at the hottest show in town – the European real estate market.
A year or so after the completion of the acquisition in March 2006, Commerzbank’s CEO, Klaus-Peter Müller, remains convinced that in that respect the timing of the acquisition was exquisite. "Every piece of research I have read since we bought Eurohypo indicates that the German and continental European real estate markets are picking up," he says. "If that is the case, we are ideally positioned to benefit from the upswing."
Overlaps between the two operations have been few and far between, given Eurohypo’s raison d’être in real estate, which was a notable gap in Commerzbank’s armoury before the acquisition. "We have one investment banking unit that has been massively strengthened by Eurohypo’s real estate expertise," says Nicholas Teller, overall head of investment banking and member of the board of managing directors.