BNP Paribas Group and its subsidiary Cortal have signed an agreement with SchmidtBank to acquire the German private bank's 66.43% equity interest in Consors for EUR287 million.
A public offer will be made to purchase the remaining equity interests in the loss making European online brokerage. Assuming purchase of the entire share capital, the total price for Consors is expected to be EUR485 million or EUR857 per account.
The acquisition of Consors will allow the French bank to integrate and expand its Cortal Internet brokerage business into Germany, in a bid to become Europe's largest online broker. In 2001, Cortal and Consors managed funds on behalf of nearly 1.2 million customers — of which 630,000 were from Cortal and 566,000 from Consors — and EUR14 billion of assets under management, each partner accounting for a half. Combined 2001 pro-forma net banking income for Cortal and Consors totalled EUR268 million, ahead of their principal rivals Comdirect (EUR165 million) and DAB (EUR123 million), says the bank.
The integration of Cortal and Consors will be backed by an industrial project promoting the strengths of the two companies. The new brokerage will be rebranded and led by Olivier Le Grand, chairman of Cortal's management board. Restructuring costs during 2002-2004 are estimated to total EUR60 million.
BNP says it expects the combined entity will bring cost synergies of EUR38 million by 2005 as a result of economies of scale in marketing budgets and administrative costs, joint back- and middle-office IT platforms and a joint Web site. The bank also expects to generate EUR15 million in additional revenues.