A day after we heard that the asset management firm Goldman Sachs recently acquired was not the one that Deutsche Bank had been shopping around since the year started, should we be surprised that there is now news that the sale of the business may now be falling apart?
The Financial Times is reporting that JP Morgan and State Street, two of the front runners to acquire the business, have dropped out of the bidding process. In addition, another bidder Ameriprise may soon throw in the towel because of the high price the German bank had set on the unit. Goldman Sachs was originally rumoured to be interested in Deutsche’s asset management business as it considered acquisitions.
The faltering deal could also mean negative publicity for incoming co-CEOs Anshu Jain and Jürgen Fitschen.
The issue appears to be the high cost of the transaction—Deutsche Bank wants around $2 billion—and the fact that many interested firms want parts of the business but not the whole, despite the fact that Deutsche Bank wants to sell the unit in tact, according to the Financial Times. A sale of broken up parts of the asset management business may only bring the bank in about $1.3 billion.
Deutsche Bank originally announced its intentions to spin off the asset management unit last November because of declining revenue and regulatory changes.