Deutsche Bank is set to buy ‘mini-investment bank’ Numis for £410 million, in a deal the German titan says will help it grow its ties with London’s top firms.
But it warned some jobs could be lost, while adding that these cuts are “not expected to be material”.
Deutsche Bank will pay 350p per Numis share, valuing the business at £410 million. Numis shares closed at 204p yesterday
Fabrizio Campelli, Deutsche’s head of corporate bank and investment banking, said the lender had been looking for a way to get closer to the UK’s biggest companies for some time.
“We have been evaluating how to accelerate the growth of our business in the UK and, as a leading UK franchise with a long history of successfully delivering superior client service and growth, Numis represents a compelling strategic fit,” he said.
“The combination enables us to realise greater revenue opportunities across our shared client base and to deepen our engagement with UK corporates.”
Deutsche Bank added that it could offer new products like M&A advisory services and foreign exchange markets to Numis clients, which include 64 FTSE 350 companies.
The acquisition may create fears of City job losses, particularly as Deutsche Bank announced yesterday that it would aim to cut management-level staff as it aims to save a further €500 million. Numis, meanwhile, sparked job cut fears when it warned earlier this month it had been hit by a lack of floats.
Deutsche Bank pointed out that the purpose of the deal was to grow in the UK, not reduce numbers. But it said there was a possibility of a small number of cuts.
“Rationale for this transaction is to grow our UK footprint and is not driven by headcount reductions,” a spokesperson said. “However, in light of the strategic plans for the combined Numis and Deutsche Bank franchises, in addition to natural attrition, there may be headcount reductions which are not expected to be material.
“The leadership and integration teams will collectively determine the need for, and focus of, any such headcount reductions, subject to any required consultation with employees and/or their representatives.”
Numis - which is based between St. Paul’s and the Guildhall and employs 344 people - was founded in 1989 as RZH before adopting its current name in 2000. Besides the UK, it also does business in the US and Ireland, where Deutsche may bring Numis’ services under its own operations.
The deal is set to close in the final quarter of this year. When it does, Numis co-CEOs Alex Ham and Ross Mitchinson will lead Deutsche Bank’s UK corporate arm, which currently employs 35.
Shares in the broker and advisor rocketed by 137p to 341p this morning. Deutsche Bank shares are up €0.07 to €9.87 in Frankfurt.
