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Deutsche Bank buys NDB
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October 12, 2000: 12:41 p.m. ET
German bank signs definitive pact to pay $49 a share cash, or nearly $1B
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NEW YORK (CNNfn) - Deutsche Bank AG agreed Thursday to acquire the remaining interest in online brokerage National Discount Brokers Group it does not already own for nearly $1 billion.
The agreement, widely-expected since earlier this week, not only provides Deutsche, one of Europe's largest banks in terms of assets, with a leading U.S. online broker, but it also obtains a top Nasdaq market maker, or a specialist firm that links buyers and sellers of Nasdaq securities.
The boards of both companies have approved the purchase, which calls for Deutsche Bank to acquire the 84 percent of NDB shares it does not already own for $49 each, or $944 million. In June, the German bank bought 3 million shares at $45 each in a private placement after the two companies signed an e-commerce alliance.
The transaction, which values NDB at $1.02 billion overall, is expected to close by the end of the year and will be slightly accretive to Deutsche Bank's 2001 earnings.
 Thursday's definitive pact follows the announcement earlier in the week that Deutsche Bank had offering to buy the remaining shares of NDB for $49 a share in cash. At the time, NDB said it was considering other offers but that talks with Deutsche Bank were advanced.
Tuesday's announcement caused NDB shares to skyrocket, nearly doubling from Monday's closing price of $25.25. The online brokerage's stock had been hit hard in recent months, primarily due to market conditions.
NDB inched up 94 cents to $48.25 around mid-day
Jersey City, N.J.-based NDB (NDB: Research, Estimates) is best known for its advertising campaign featuring a mallard duck and the slogan "We put you under our wing."
The transaction will make the combined firm a Top-5 Nasdaq market maker. NDB's market-making arm, NDB Capital Markets Corp., is a leading market maker and generates nearly two-thirds of the firm's revenue. It makes markets in over 4,000 Nasdaq and OTC securities.
Analysts viewed NDB's market making capabilities as the real driver behind the deal. The company generates roughly two-thirds of its revenues through its capital markets arm
Deutsche Bank's offer is the latest acquisition of a top market maker. In September, Goldman Sachs bought Spear Leeds & Kellogg LP, a leading securities clearing firm, for $6.65 billion in cash and stock. In June, Merrill Lynch paid $900 million for Herzog Heine Geduld, the third-largest U.S. firm linking buyers and sellers on Nasdaq.
US Bancorp Piper Jaffray and Credit Suisse First Boston advised NDB. 
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