Hewitt buys remaining stake in German merger
GERMANY - Hewitt Associates has bought the remaining stake in the German consultancy joint venture known as BodeHewitt and is hoping to complete the merger of Hewitt Associates Germany by the end of this year.
Hewitt bought a majority stake in Bode Grabner Beye in 2005 to deliver corporate pensions and actuarial services to German corporates.
The arrangement has been successful up to now, delivering "double digit" growth annually, however the business conflicts of interest which can arise from such a venture led management to believe that now was the right time to buy the remaining stake from Bayerische Hypo- und Vereinsbank (HVB)and complete the merger, according to Niels Rasmussen, managing director of Hewitt Associates Germany.
"We had a majority stake and had an agreement when we merged into the joint venture in 2005 that we would be acquiring the business no longer than 2011," said Rasmussen.
"The decision is largely driven by good opportunities in the German market, as we felt we couldn't take some opportunities up while it was only a joint venture. This move provides us with the ability to continue to grow the market and perhaps at a faster rate," he added.
Bode was able to sign the joint venture with Hewitt in 2005 as an earlier long-term joint venture agreement with Watson Wyatt had been terminated so the global consultancy could go it alone. (See earlier IPE article: Hewitt forms German joint venture)
The firm has grown to 230 staff since signing the 2005 agreement but the medium-term expectation is Hewitt's German operation will grow again, especially in the retirement and financial management division (RFM).
Under the new arrangement, Rasmussen will continue as managing director of the German operation while the RFM unit will be led by Olaf Petersen and Dr. Georg Thurnes, both of whom are currently board members at BodeHewitt.
Rasmussen said while now might not be the right time to be looking at real estate, the firm may expand its presence further down the road and consider opening new offices in Berlin, Düsseldorf and Hamburg.
He also said they "do not expect to lose nor intend to" reduce staff though the name is changing to Hewitt Associates now it is a full member of the firm.
The merger is expected to be completed by 1 January 2010.
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