Credit Suisse First Boston, a subsidiary of Credit Suisse Group, launched a friendly bid to acquire Donaldson, Lufkin & Jenerette Inc. Aug. 30. CSFB will pay French insurer Axa around $11.5 billion for its 71 percent stake in DLJ.\nThis move by Lukas Mühlemann, CEO of Credit Suisse Group, comes as a surprise to most. Just two weeks before the deal was announced, he was quoted saying, "The primary thing is to grow under our own steam because acquisitions usually come with significant goodwill (a premium price) and financial costs … In addition, the subsequent integration can lead to problems." CSFB admitted to participating in talks with DLJ as early as July of this year.\nThis statement by Mühlemann can probably be discounted as a ruse to avoid unwanted attention and speculation before he closed the deal. The recent wave of consolidation in the financial services industry has many major players on the hunt or ready to sell. Bear Stearns, a respectable Wall Street investment bank, recently told BusinessWeek that it was willing to be acquired if the price was right. United Bank of Switzerland AGrecently acquired the venerable Pain Webber. Other major banks, including JP Morgan and Lehman Brothers are rumored to be on the takeover list. Last week, financial behemoth Citigroup agreed to acquire lender Associates First Capital Inc. for $29.5 billion in stock.\nJerome P. Kennedy, an executive vice president at Merrill Lynch, said, "\'Within three years, we expect there to be no major midsize independent securities firms in this country … We\'ll end up with six to 10 top-tier global players."\nThe CSFB/DLJ deal will propel the new company into the top three rankings of various bulge-bracket (high profit margin) banking businesses, including investment banking and asset management of super-wealthy clients. In a press release by Credit Suisse Group, it reported the combined assets of the companies total $842 billion.\nThe logic behind the recent wave of mergers and acquisitions in the financial services industry is founded on two premises. First, by increasing volume, banks can lower costs. Second, by acquiring another bank the acquirer can quickly expand its range of services and capture more of its customers' business. \n According to its press release, CSFB expects to generate annual cost savings of nearly $1 billion by 2002. With DLJ's online trading service, DLJ Direct, dominance in high-yield debt issuance and expertise in key high growth sectors, including telecommunications and health-care, CSFB expands its array of services, enabling it to attract more business from its list of corporate clients and high net worth individual clients.\nMühlemann, when commenting on the benefits of the deal, said, "This acquisition … not only creates a more powerful investment bank through the combination of Credit Suisse First Boston and DLJ, but also adds great value to the Group's asset gathering businesses through a significant expansion of its U.S. activities"