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Deutsche Bank AG (DBK) agreed to sell its BHF-Bank unit to RHJ International (RHJI) for 384 million euros ($497 million) after year-long talks on a deal that helps Germany’s biggest lender meet tougher capital requirements.
The final price paid by RHJ’s Kleinwort Benson Group is subject to adjustments, the companies said in separate statements today. The deal also requires regulatory approval.
Deutsche Bank has sought a buyer for BHF-Bank since acquiring the wealth manager and investment banking operation through the purchase of Sal. Oppenheim Group in 2010. Deutsche Bank formed a unit this month, which plans to cut risk-weighted assets by 45 billion euros by the end of March with about 8 billion euros of that coming from corporate investments as the Frankfurt-based company sells assets including BHF-Bank and Actavis Group hf.
“We see it positively that Deutsche Bank has finally reached agreement with Kleinwort Benson on the sale of BHF,” Philipp Haessler, an analyst with Equinet Bank AG in Frankfurt who recommends investors buy Deutsche Bank shares, wrote in a note today. “The negative profit and loss impact and the positive capital impact should both be limited.”
Deutsche Bank fell 0.8 percent to 32.64 euros in Frankfurt trading as of 11:22 a.m. local time. That compares with the 0.7 percent decline in the 38-company Bloomberg Europe Banks and Financial Services Index. RHJ rose 3.2 percent in Brussels.
Previous efforts by Deutsche Bank to sell BHF-Bank have been opposed by BaFin, the country’s financial markets regulator. The lender’s plan to sell to LGT Group (LGT) last year failed after the regulator voiced concern about the acquisition by the bank owned by the family of Liechtenstein’s prince.
Haessler said that while it “cannot be taken for granted,” he expects the deal to get regulatory approval.
Deutsche Bank said in February that it booked 97 million euros of expenses related to BHF-Bank. The divestiture follows Deutsche Bank’s plan, announced in April, to sell Actavis to Watson Pharmaceuticals Inc. (WPI)
RHJ, which entered exclusive negotiations with Deutsche Bank in July last year, said Frankfurt-based BHF-Bank would complement Kleinwort Benson’s services in the U.K., the Channel Islands and Ireland.
Fosun Group, AQTON SE, the investment vehicle of German entrepreneur Stefan Quandt, entities affiliated with Timothy C. Collins and investment funds managed or sub-advised by BlackRock Inc. (BLK) will help inject capital into Kleinwort Benson, RHJ said. RHJ will retain a stake of about 60 percent of Kleinwort Benson, according to the Brussels-based company’s statement.
Kleinwort Benson will acquire about 36 billion euros of assets under management in the deal, according to the statements.
“With their client focus on entrepreneurs, corporates and wealth creators, and strong prospects in their domestic markets, Kleinwort Benson Group and BHF-BANK are also strategically well- aligned,” Leonhard Fischer, RHJ’s chief executive officer, said in the statement. “We therefore see the proposed acquisition as a significant opportunity to create a strong, client-centric financial services group.”
RHJ said it will hold a conference call for analysts and investors at 5 p.m. local time in Brussels today.
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