Deutsche Bank has agreed to sell its BHF-Bank to RHJ International for approximately $497 million after year-long negotiations. In addition, RHJ International secured backing from shareholders and investors including a Chinese conglomerate. The RHJ International’s move to secure its acquisition of BHF-Bank was caused by the fact that German regulator had denied twice to give the approval to 2 previous deals.
The BHF-Bank deal
The final price paid by RHJ International’s Kleinwort Benson Group is, however, subject to future adjustments. Deutsche Bank agreed to sell BHF-Bank unit to Kleinwort Benson Group, a unit of RHJ International, for $497 million in cash. Deutsche Bank is to sell 100 percent of the unit. In addition, the BHF-Bank acquisition requires regulatory approval by German markets regulator, BaFin.
If the acquisition of BHF-Bank is approved, the deal with RHJ International will end Deutsch Bank ministrations of selling its unit of BHF-Bank. The unit was bought by Deutsch Bank along with private bank Sal. Oppenheim in 2009. However, it was just in 2010 when Deutsch Bank executives decided to put BHF-Bank on sale as they declared it to be noncore unit.
Philipp Haessler, an analyst with Equinet Bank AG in Frankfurt, said: “We see it positively that Deutsche Bank has finally reached agreement with Kleinwort Benson on the sale of BHF.” In addition, as a result of the BHF-bank deal he has advised investors to buy Deutsche Bank shares.
The acquisition of BHF-Bank would be a strategic fit with RHJ International’s wealth-management unit Kleinwort Benson's existing businesses, according to Deutsche Bank’ executives.
Deutsche Bank’s Attempts of Selling BHF-Bank
Deutsche Bank had attempted to sell BHF-Bank, however its efforts were opposed by BaFin, which is the German financial markets regulator. In 2011 Deutsche Bank unsuccessfully tried to sell BHF-Bank to Lichtenstein's LGT Bank owned by the royal family of the Alpine principality of Liechtenstein, German regulators blocked it.
Just this year, in March, RHJ International and Deutsche Bank agreed on a deal regarding BHF-Bank acquisition, yet BaFin rejected once again the agreement citing concerns over RHJ International’s funding.
However RHJ International informed recently that it had secured additional backing from outside investors such as China's Fosun Group, BMW heir Stefan Quandt as well as funds controlled by U.S. investor Timothy C. Collins and Blackrock Investment Management. According to the RHJ International’s statement, these investors would back a capital, which has been increased at Kleinwort Benson, a management unit bought by RHJ International in 2009 for £225 million.
According to RHJ International, Fosun Group, AQTON SE, heir Stefan Quandt and others will help add the essential capital into Kleinwort Benson. As it was noted in the company’s statement, RHJ International would keep a stake of about 60 percent of Kleinwort Benson. Leonhard Fischer, the chief executive officer at RHJ International, strongly believes that “Kleinwort Benson Group and BHF-BANK are also strategically well- aligned”.