All or nothing

Since 1904, the Gerling family's continuous ownership of the insurance group which bears its name has been all but uninterrupted. However, disaster struck in 1974, when the Herstatt Bank, in which Hans Gerling was involved, collapsed. He was forced to sell his majority stake in the insurance company and relinquish his post as chief executive. For eight years he had to endure the fact that he did not have control of the firm established by his father. Sitting on the supervisory board was not enough for the man who had almost singlehandedly rebuilt the company amid the ruins of Cologne after the end of the Second World War. But in 1982 he had made enough money once more to buy back control and reinstall himself at the head of the board table.

When Rolf Gerling took over the ownership of the company when his father died in 1992, he decided not to take charge of it as his grandfather and father had done before him. Instead he set up a management holding company and let Deutsche Bank buy a 30% stake.

By the beginning of 1998 this had become a problem. Deutsche Bank were keen to follow their rivals in building up an insurance empire. As the war among banks to recreate themselves as full-service financial conglomerates hotted up, Deutsche decided its stake in Gerling was no longer enough. It owned less than a third of the insurer and Gerling's board had jealously guarded its own independence. Deutsche Bank's chairman Rolf Breuer decided he had to act so as not to fall behind his rivals. He decided he wanted all or nothing of Gerling.

His initial approaches to Gerling's senior managers had been polite enough, but as the discussions dragged on for three months, Breuer's frustration began to show. In a number of newspaper interviews he made clear that he would only be satisfied with complete control of the insurer. As the war of words came to a head an emotional appeal by Rolf Gerling about maintaining the unique character of the company led the board to opt for independence and rebuff Breuer.

Why did Gerling refuse to sell out to Deutsche Bank? Zech: It was a mixture of Rolf Gerling's deep personal attachment...