Principal buys BT for A$2.1bill

United States-based Principal Financial Group has announced it is buying Bankers Trust Australia for A$2.1 billion, which includes BT's New Zealand funds management operations.

Friday, June 18th 1999, 12:00AM

United States-based Principal Financial Group has announced it is buying Bankers Trust Australia for A$2.1 billion, which includes BT's New Zealand funds management operations.
BT New Zealand executive vice president Myles Baron Hay says the announcement is great news as its ends the uncertainty surrounding the business and it keeps BT as a business entity.
The concern from many, including BT's staff, is that Deutsche Bank was going to sell the business to an existing player in the market.

Principal says it had been looking to expand into the Australian market even before BT was put up for sale. The deal makes Principal the second-biggest fund manager in Australia and fits with its strategy to focus outside the United States, on markets, such as the United Kingdom, Japan, Brazil and Australia, where there is strong growth in pension savings.
Principal chief executive and chairman David J Drury says the sale is "a winning combination."
"The winning combination is BT Funds Management's strong active fund management capability and the recognised brand name, combined with our proven expertise in investment management and global leadership in retirement services and technological solutions.
"Together we will be a powerful force in one of the fastest growing pension systems in the world," he says.
BT Funds Management chief executive Ian Martin says the sale "decisively ends uncertainty created by the sale process."
Much of that uncertainty stems from Deutsche's failed attempts to sell the business earlier in the month. That process collapsed 10 days ago when top bidder Westpac Bank pulled out of the sale.
Baron-Hay says the uncertainty has impacted on BT's funds flow in New Zealand. During the process there have been strong funds flow across the industry, however BT, which is one of the leading firms, has been treading.
Redemptions have remained at normal levels, however BT had not been receiving much new business.

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