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Deutsche buys Zurich's Scudder
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September 24, 2001: 2:33 a.m. ET
Deutsche Bank agrees to buy Zurich's Scudder for $2.5 billion
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LONDON (CNN) - Deutsche Bank agreed on Monday to buy Zurich Financial Services' investment-management business for $2.5 billion.
Rolf Breuer, Chief Executive of Deutsche Bank, has been looking to expand the company's asset management business, broadening its sources of income to compete with the likes of Switzerland's UBS and Credit Susisse.
The long-awaited acquisition of Scudder will make Deutsche Bank, Europe's biggest, one of the largest global money managers. Scudder has $278 billion in assets and will boost Deutsche's assets to about $900 billion.
As part of the agreement, Deutsche Bank will give Zurich 75.9 percent of its insurance activities in Germany, Italy, Spain and Portugal, worth  1.5 billion ($1.4 billion).
Zurich, Europe's third-largest insurer, will also gain access to Deutsche Bank's retail banking branches to distribute its products in Germany, Europe's biggest market.
The "agreement also include a broad strategic cooperation between Deutsche Bank and Zurich Group primarily in the fields of insurance distribution, asset management and banking," Deutsche Bank said in a statement.
Deutsche Bank said it is in talks with regard to buying Zurich's asset management business in Germany and Italy. Deutsche is also trying to establish a price for its Bonnfinanz financial services unit.
Zurich said net proceeds from the sale of its Scudder business will total about $700 million. The money will help reduce its debts after an aggressive expansion programme. Zurich will retain its UK-based Threadneedle Investment unit, which manages $67 billion in assets and is an integral part of its insurance business. 
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