Three weeks after it announced its plans to acquire Baltimore-based Alex. Brown Inc., Bankers Trust New York Corp. signed a definitive agreement yesterday to buy NationsBank Corp.'s $133 billion-asset institutional trust business.
The deal will increase Bankers Trust's global assets under custody to nearly $2 trillion. Bankers Trust will gain 465 institutional customers, including corporations, nonprofit organizations, public agencies and union pension plans.
Terms of the transaction were not released. The deal is expected to close in the second quarter.
The acquisition "fits our goal of expanding our institutional trust business and will allow us to further leverage our technology and custody infrastructure," Frank Newman, chairman and chief executive of Bankers Trust, said in a statement.
Bob Shell, president of NationsBank Asset Management Group, said the sale reflects the company's decision to focus on its investment business, which has $114 billion in assets nationwide.
"We are concentrating on managing money for individuals and institutions, and we selected Bankers Trust to provide institutional custody services," Shell said in a statement.
Bankers Trust has been in the institutional trust business since the company was founded in 1903. It is the fourth largest trust administrator in the world.
The transaction is not expected to affect Bankers Trust earnings, the company said.
Arthur P. Soter, an analyst with Morgan Stanley, said the deal is a small one for Bankers Trust, but it sends a message that the company intends to be a major player in the trust business.
"If you are going to be in that business you have to commit yourself to heavy investment," Soter said. "You go out and buy sizable portfolios to get scale quickly."
The NationsBank deal follows Bankers Trust's April 6 announcement it intends to acquire investment banker Alex. Brown. Brown supplies Bankers Trust with much-needed investment banking and brokerage units. The transaction is expected to close in the fourth quarter.
Soter said Bankers Trust is repositioning itself "decisively and aggressively."
If it wants to be a long-term player, "the time to do it is now," he said. "If they wait, it may be too late."
Pub Date: 4/26/97