Joh. Berenberg Gossler Co. KG, the world’s
second-oldest bank, wants to win market share from U.S.
investment banks in Germany after agreeing to cooperate with a
lender owned by the state of Bavaria.

Berenberg will offer corporate clients advice on mergers
and acquisitions and share sales while Munich-based Bayerische
Landesbank supplies funding for the transactions, the companies
said in a joint statement today.

Banks are increasing profit from advising on deals and
selling securities for clients as stricter capital rules cut
returns from trading. With the exception of Frankfurt-based
Deutsche Bank AG, U.S. banks dominate German merger advice and
equity issuance with access to their home country’s capital
market and the loans they can offer companies to pursue
takeovers.

“We’re certainly going to be competing with our Anglo-Saxon rivals, but also domestic banks which don’t have our
expertise,” Hendrik Riehmer, a Berenberg partner, told
reporters in Frankfurt today. “Some U.S. firms will drop out of
mid-sized deals, not because they’re worse, but because they
have different services on offer.”

Berenberg and BayernLB are better placed to issue
promissory notes and help clients sell securities to German
savings banks and insurers, while U.S. banks specialize in
bridge financing and debt sold to hedge funds, Riehmer said.

Four of the top five deal-makers by volume in Germany last
year were from the U.S., while three of those firms occupied the
top three spots in share-sale rankings, according to data
compiled by Bloomberg. Berenberg, located in Hamburg, was
seventh in share sales, the data show.

Berenberg, which was founded in 1590, is the world’s oldest
bank after Italy’s Banca Monte dei Paschi di Siena SpA.

To contact the reporter on this story:
Nicholas Comfort in Frankfurt at
ncomfort1@bloomberg.net

To contact the editors responsible for this story:
Elisa Martinuzzi at
emartinuzzi@bloomberg.net
Steve Bailey, Jon Menon