Combination of Dresdner Kleinwort Benson with Wasserstein Perella Strengthens Dresdner Bank's Investment Banking Activities.

Business Editors

FRANKFURT, Germany & NEW YORK--(BUSINESS WIRE)--Sept. 18, 2000

Transaction underscores significant progress in

implementation of Dresdner Bank's strategy

Dresdner Bank announces that Dresdner Kleinwort Benson is to combine with Wasserstein Perella to create a world-class investment bank with a quality advisory and relationship culture and full-service financing and distribution capabilities. Exploiting the recognised brand name and franchises of the two businesses, the combined investment bank will be named Dresdner Kleinwort Wasserstein.

The combination of Dresdner Kleinwort Benson with Wasserstein Perella represents further significant progress in the implementation of the new strategy announced by Dresdner Bank at its annual general meeting in May. Dresdner Bank remains committed to further investment in its investment bank, focusing globally on those products and sectors in which the business excels.

Bernd Fahrholz, Chairman of the Board of Managing Directors of Dresdner Bank, said: "This transaction, which gives us a strong position in the US advisory business, will enhance the global profile of our investment bank. It creates significant benefits for our shareholders, clients and employees. Dresdner Kleinwort Benson and Wasserstein Perella are a perfect match."

Wasserstein Perella is a premier US-based investment bank, with a leading U.S. and strong international M & A franchise, the leading US restructuring practice, a top 3-ranked US high yield business (Grantchester) and a growing US equity sales and trading operation. Wasserstein Perella has generated compound annual growth in investment banking revenues of over 30 percent over the last five years and is currently enjoying its best year so far, expecting to generate total revenue of around $400 million, the majority of which is generated from advisory services.

Wasserstein Perella ranked No. 5 by value in US M & A transactions in the first half of 2000. Recent landmark M & A assignments include advising: Time Warner on the $165 billion offer by AOL; Philip Morris on its $19 billion offer for Nabisco; UBS on its $12 billion offer for PaineWebber; Wal-Mart on its $12 billion acquisition of Asda; Ernst & Young Global Consulting on its $11 billion acquisition by Cap Gemini; and Axa Financial on the $9 billion offer by AXA.

Dresdner Kleinwort Benson is a leading European-based integrated investment bank, enjoying an outstanding year. During the first half of 2000, it ranked No. 1 by value of UK public company M & A transactions and No. 7 by value of European M & A transactions. Recent notable assignments include advising: Deutsche Telekom on its $51 billion offer for Voicestream; National Westminster Bank on its (pound)26 billion defence against bids from Bank of Scotland and Royal Bank of Scotland; Norwich Union on its (pound)24 billion merger with CGU to create CGNU; and Orange on its (pound)20 billion acquisition by Mannesmann and subsequent (pound)25 billion sale to France Telecom. During the first half of 2000, Dresdner Kleinwort Benson was No. 3 bookrunner of European equity issues, acting as Joint Global Co-ordinator on the EUR 10 billion secondary issue by Deutsche Telekom and the EUR 3 billion IPO of T-Online, and No. 2 bookrunner of European bond issues.

Wasserstein Perella and Dresdner Kleinwort Benson will be fully merged to form Dresdner Kleinwort Wasserstein. This is expected to lead the significant revenue enhancement in three key areas:

- increased mergers and acquisitions advisory assignments arising from the
outstanding global capability that the merged business will offer to clients;

- additional opportunities to provide financing to Wasserstein Perella's
clients, with Wasserstein Perella being part of a larger business with
substantial equity and debt distribution capabilities, backed by the Dresdner
Bank group's balance sheet strength; and

- additional opportunities for Grantchester, Wasserstein Perella's high yield
business, to act as underwriter and bookrunner to US high yield issues through
the backing of the Dresdner Bank group's balance sheet strength.

Clients will benefit from Dresdner Kleinwort Wasserstein's global M & A and financing capabilities. In the first eight months of 2000, the combined investment bank would have ranked No. 6 by value of global M & A, advising on M & A deals with a total value of US$427 billion.

Leonhard Fischer, Chairman and Chief Executive Officer of Dresdner Kleinwort Benson said: "We are delighted with the opportunity to create a world-class investment banking business. The expertise, culture and relationship-oriented philosophy of Wasserstein Perella are highly complementary to those of Dresdner Kleinwort Benson. The combination will create substantial benefits for the clients and employees of both firms around the world."

Bruce Wasserstein, Chairman of Wasserstein Perella, commented: "This transaction is a credit to tall of Wasserstein Perella's employees who are responsible for the success of our firm. I have a high regard for Dresdner Kleinwort Benson, whose culture and expertise compliment those of Wasserstein Perella. The creation of Dresdner Kleinwort Wasserstein is only the beginning of the next phase of development in what will be even more fulfilling times for all employees of the merged investment bank."

Prior to completion of the transaction, Wasserstein Perella will spin off Wasserstein & Co., Inc., its merchant banking and private equity business, to existing Wasserstein Perella shareholders: this business will therefore not form part of the transaction. Wasserstein Perella shareholders will receive consideration of $ 1,369 million (EUR 1,569 million) payable through the issue of 30.5 million new Dresdner Bank ordinary shares, which will be financed by a capital increase out of authorized capital. In addition, Dresdner Bank will fund a retention plan amounting to $190 million (EUR 218 million) for Wasserstein Perella management and employees.

Taking expected revenue enhancement into account, the Board of Managing Directors of Dresdner Bank expects the transaction to lead to mild dilution in the cash earnings per share of Dresdner Bank in he first full year following closing.

Dresdner Kleinwort Wasserstein will operate as an autonomous division within the Dresdner Bank group with its own Board, which will include three external Non-Executive Directors and two Non-Executive Director representatives from the Board of Managing Directors of Dresdner Bank, one of which will be Bernd Fahrholz, Chairman of the Board of Managing Directors of Dresdner Bank, and an Executive Committee. Reflecting the strength of the senior management teams of both Dresdner Kleinwort Benson and Wasserstein Perella, the Executive Directors on the Board and the members of the Executive Committee will be drawn from both businesses.

The Executive Directors will be Bruce Wasserstein as Executive Chairman, Leonhard Fischer as Chief Executive Officer, Tim Shacklock and Jeffrey Rosen as Deputy Chairmen and Conor Killeen. Bruce Wasserstein and Leonhard Fischer will be Co-Chairmen of the Executive Committee, which will also include Tim Shacklock as Deputy Chairman and Co-Head of Investment Banking, Mike Biondi as Co-Head of investment banking and Conor Killeen as Co-Head of Equities. The other members of the Executive Committee from Dresdner Kleinwort Benson will be announced shortly.

Tim Shacklock will chair the Management Committee of the new Investment Banking business line of Dresdner Kleinwort Wasserstein. In view of this responsibility and the increased autonomy of the new investment bank. It has been agreed that he will not join Board of Managing Directors of Dresdner Bank as had previously been envisaged.

The transaction, which is conditional on the approval of the Supervisory Board of Dresdner Bank, which holds its next regular meeting on 20 September, and on U.S. regulatory clearances, is expected to close before the end of 2000.

Note: Throughout this announcement, an exchange rate of $0.873 = EUR 1, representing the average of the last 10 business days' closing spot exchange rates, and a Dresdner Bank share price of EUR 51.43, representing the average of the last 10 business days' closing mid-market prices, have been used.