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Germany set for another banking mega-deal
2008-09-11
BERLIN (AFP) - In what would be the third mega-deal in German retail banking in two months, Deutsche Bank has confirmed it is looking at an acquisition that would more than double its high street customer base. Deutsche Bank said in a statement late on Tuesday that it was in "advanced talks" on buying a stake in Postbank from Deutsche Post, Germany's former postal monopoly. A deal, which could be worth more than seven billion euros (9.7 billion dollars) and which may be agreed as soon as Friday when Deutsche Post's board meets, would represent a huge step up for Deutsche Bank. As a unit of the Deutsche Post, Postbank has Germany's biggest retail network with its more than 14 million clients able to bank in any of the country's post offices. Deutsche Bank, with just under 10 million retail clients in Germany, is set to be leapfrogged in terms of branches and customers following Commerzbank's 9.8-billion-euro takeover of Dresdner Bank announced on August 31. It remains the country's biggest lender measured by assets, however, and its investment banking arm makes it the only German bank with a major presence on Wall Street and London's Square Mile financial district. After years of inertia, a deal between Deutsche and Postbank would be the latest in a recent flurry of consolidation in German retail banking where cooperatives and state-owned Sparkassen savings banks retain a strong presence. Before the Commerzbank/Dresdner merger, it was France's Credit Mutuel that made waves in July when it announced it was buying Citibank's German network with its 3.3 million clients for 4.9 billion euros. And in another banking deal, last month IKB, a casualty of the subprime mortgage crisis and a lender to small- and medium-sized businesses, was sold to US private equity group Lone Star for a rumoured 150 million euros. Deutsche Post has been looking for a buyer of its 50-percent-plus-one-share stake in Postbank and with Commerzbank having Dresdner to digest, Deutsche Bank was already widely seen as the most likely buyer. If Deutsche Bank agrees to buy more than a 30-percent stake in Postbank it would be obliged under German law to make an offer to buy the remaining shares listed on the stock market. Based on Postbank's current share price that would mean Deutsche Bank might have to fork out more than seven billion euros, which would require it to raise fresh capital to fund the acquisition. But press reports have indicated that Deutsche Bank intends to avoid having to make a full offer by buying less than 30 percent. The General-Anzeiger daily reported Thursday that the bank was eyeing a stake of 29.75 percent. Deutsche Bank's supervisory board has already approved such a deal, which would also see it given first refusal for Deutsche Post's remaining shares, the local paper cited unnamed financial sources as saying.
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