ESMT ponders merger with Frankfurt School
The European School of Technology and Management (ESMT) in Berlin is considering joining forces with the Frankfurt School of Finance and Management. While the private university in Frankfurt could profit from a merger, for the ESMT it would be an elegant phasing out of the business school that was founded by 25 German companies. After all, the business school, which positioned itself the “German Harvard” in 2002, is considered to be a failure.
The meeting at the end of June was held in secret and the topic was explosive. “Creating a leading European Business School in Germany: A joint vision for ESMT and Frankfurt School” was the title of the presentation that was said to be discussed by Michael Diekmann, Allianz boss and Executive Director of the ESMT Foundation; and Frank Mattern, McKinsey Germany boss, on the ESMT side. Present on behalf of the Frankfurt School were President Udo Steffens and Klaus-Peter Müller, Chairman of the Supervisory Board of Commerzbank. Müller is also Chairman of Frankfurt School’s Foundation Board.
The merger would by all means have advantages for the Frankfurt School. The former “Hochschule für Bankwirtschaft” (university of applied sciences for bank management) has developed well over the past years, is in good financial shape und would like to establish itself and expand in the field of management.
For the ESMT, a possible merger would rather be an admission of its failure. The history of the ESMT is, above all, a textbook example of how not to run a school. A convincing concept and sufficient funds were missing from the beginning. There is still a lack of professors and students, as well as attractive-
ness on the international market. With a total of 106 students, both MBA programs can only survive because there are massive scholarships.
The school wants to have collected 200 million euros in endowments by 2012. But as of now they only have 115.2 million euros. In 2010 the companies provided a cash injection in the amount of 22 million euros. They want to pay in another 28 million euros “in the coming years.” The companies want to “provide the money collectively” and in a way that is suitable for each company, explained Press Officer Farhad Dilmaghani. That doesn’t exactly sound like a big commitment. Insiders have since long been reporting that several of the sponsors have been looking to make an exit out of the financial disaster for a long time now. A fusion would definitely provide a good opportunity.
The solo attempt by Diekmann and Mattern is also noteworthy. Next to Allianz, Bosch, Eon, Lufthansa, SAP, Siemens, Telekom, ThyssenKrupp and others, McKinsey doesn’t just belong to the illustrious circle of sponsor companies, but is also said to have designed the concept for the ESMT in the first place.
“There are constantly talks about possible cooperations right up to mergers of business schools. There is also a paper from the Frankfurt School with the title that you have quoted. This paper, however, has never been discussed in any panel of the ESMT,” stated Diekmann on Tuesday in response to a query. In the meantime, some sponsor companies and ESMT employees have reportedly been informed about the cooperation plan.