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C-bank in Telekom tie-up
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February 17, 2000: 8:44 a.m. ET
Germany's Commerzbank joins forces online with Deutsche Telekom
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LONDON (CNNfn) - Commerzbank said Thursday it agreed on a share swap with the Internet unit of Deutsche Telekom, by which Telekom's T-Online division and Commerzbank's Web-based banking unit Comdirect will take 25 percent stakes in each other.
Comdirect and T-Online, Europe's biggest Internet service provider, plan to form a partnership to offer financial services at home and outside Germany. With both companies planning to come to market around April, the deal means that the new stocks are assured of a warm market welcome, an analyst said.
"This is an immense deal," said Adrian Pilz, banking analyst at Fox-Pitt Kelton in London. "If it's exclusive then it's the best deal that Comdirect ever did."
Commerzbank shares rose 5.2 percent, to 38.83 euros in Frankfurt. Deutsche Telekom rose 3 percent.
"There will be closer co-operation in the financial service area of T-Online's internet portal strategy," said Commerzbank in a statement. "There are also plans to develop a special internet-based IPO subscription service."
T-Online boasts a customer-base of 4.2 million, and a 60 percent growth rate year-on-year, while Comdirect, with 306,000 customers, is Europe's largest online discount brokerage firm.
A partnership would offer Comdirect a good fit as it plans to expand into France, the U.K. and Italy by the end of 2000.
For T-Online, the link-up would give it a presence in France, extending outside its operations in Germany and Austria.
Today's announcement follows Telekom's agreement Wednesday to acquire Internet access provider Club Online from France's Lagardere, sparking a 5 percent gain in Telekom's shares Wednesday.
"We will see more and more banks striking co-operations with internet portals," predicted Pilz.
Among other recent alliances between telecom and financial companies, Spanish telecommunications group Telefonica and bank Banco Bilbao Vizcaya Argentaria formed a similar online-banking venture last Friday. In Lthe U.K., mortgage lender Halifax and British Telecommunications this week agreed on a tie-up to offer online financial services. 
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