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International -- The Stars of Europe -- Dealmakers
Paul Achleitner (int'l edition)
CFO -- Allianz -- Germany
The Apr. 5 collapse of the proposed $30 billion merger of Deutsche Bank and Dresdner Bank could have been a major setback for Paul Achleitner, one of the deal's leading architects. But the chief financial officer of Allianz Group, Germany's mighty insurer, is unfazed. "The restructuring of corporate Germany will continue," he says. "Sharper global competition coupled with greater shareholder activism is driving the process forward. It won't come to a stop just because of the Deutsche-Dresdner debacle."
No one knows the German merger-and-acquisition scene better than Achleitner, 43. As head of Goldman, Sachs & Co. in Frankfurt through most of the 1990s, he masterminded a series of M&A deals and privatizations that triggered German restructuring. Now as CFO of Allianz, he plans to accelerate the trend by selling off many of the major stakes that the Munich-based giant owns in BASF, Vivendi, and other leading Continental companies. "It's in our interests to sell some of our nonstrategic shareholdings and reinvest the proceeds in companies that correspond to our core businesses," he explains. As he does that, dozens of companies will become takeover targets because they will lack the protection of Allianz--their major shareholder.
He may be an Austrian by birth, but Achleitner is almost a household name in Germany. He and his wife Ann-Kristin Achleitner, professor of banking and financial management at the European Business School in Oestrich-Winkel near Wiesbaden, make up the golden couple of German finance. Achleitner studied economics at the University of St. Gallen in Switzerland and then did an MBA at Harvard University. He worked in New York for Bain & Co. before joining Goldman in 1989, the year the Berlin Wall collapsed.BRIGHT BANKER. At Goldman, Achleitner was responsible for privatizing large chunks of East German industry. His success in that area convinced many German executives and politicians that the New York-headquartered Goldman was a better investment bank than the German universal banks.
Under Achleitner, Goldman was retained to help privatize Deutsche Telekom. It also advised Daimler-Benz in the negotiations for its $36 billion merger with Chrysler Corp. in 1998. Achleitner quickly became Germany's premier investment banker. He joined Allianz, he says, because "I wanted to help foster change in the German economy from the inside." Shares in the insurer leapt 4% last Sept. 15, when his appointment was announced. They've risen 40% since.
Achleitner will be helped by the German government's plans to abolish capital-gains taxes on the sale of listed companies' shares in other listed companies. The reform, which takes effect at the start of next year, will make it far more attractive for big investors like Allianz to sell off their stakes in industry. He signaled what was in store less than three months after joining Allianz on Jan. 1. In March, he helped broker the landmark merger agreement between Deutsche and Dresdner, Germany's largest and third-largest banks. The plan called for Allianz to swap its stakes in the two banks for Deutsche's asset management subsidiary DWS and part of the bank's retail network.CHANGES AFOOT. Although the deal subsequently collapsed due to differences over the fate of Dresdner's investment banking subsidiary, Dresdner Kleinwort Benson, it shows how far Achleitner will go to reshape Allianz' $40 billion-plus portfolio, and the enormous impact his actions could have. If it had gone through, say financiers, the Deutsche-Dresdner deal would have transformed German finance.
Either way, it wasn't long before Achleitner had negotiated a second major restructuring move. On May 4, Allianz and reinsurer Munich Re, which hold 25% stakes in each other, agreed to reduce their cross-shareholdings to 20% and swap some of the stakes they own in several companies, such as Munich insurer Bayerische Versicherungen. The move will free billions of dollars and could spark the most extensive restructuring of German industry since World War II.
Still, there are limits to Achleitner's Anglo-Saxon tendencies. He dislikes hostile takeovers and recognizes that companies have to take the interests of employees into account. "Stakeholders as well as shareholders also play a decisive role in companies," he says. But that won't stop his forging ahead with some eye-popping deals that will send shock waves through Europe's largest economy and speed restructuring both at home and abroad.