Deutsche Bank Buys ABN Assets
The businesses to be acquired by Deutsche Bank are part of ABN AMRO Business Unit Netherlands and include two corporate client units that provide a range of financial services to large corporate clients.
July 2, 2008
Deutsche Bank said Wednesday it will buy commercial banking businesses of ABN AMRO in the Netherlands for €709 million, or $1.13 billion, in cash. The deal is expected to close in the fourth quarter.
In April, Fortis and ABN Amro announced that they would sell these businesses to address European Commission concerns over its "concentration in the Dutch banking market resulting from Fortis' acquisition of certain ABN AMRO assets." Last year, Fortis, RBS and Santander won a heated bidding war for ABN AMRO.
The businesses to be acquired by Deutsche Bank are part of ABN AMRO Business Unit Netherlands and include two corporate client units that provide a range of financial services to large corporate clients. Also the German banking firm will buy 13 commercial advisory branches that serve medium-sized clients, segments of Rotterdam-based bank Hollandsche Bank Unie N.V.; and the factoring services company IFN Finance B.V. IFN Finance is the Dutch part of ABN AMRO’s factoring unit IFN Group Finance.
The businesses to be acquired by Deutsche Bank serve over 35,000 commercial business clients as well as 8,000 private clients and employ 1,400 people. The terms and conditions of the sale are such that ABN AMRO will provide initial credit risk coverage for around €10 billion worth of risk weighted assets. The capital required for this credit risk coverage will be released over time.
The businesses concerned produced pro forma full year 2007 pre-tax profits of about €140 million. The sale price represents a discount of approximately €300 million to the businesses’ net asset value.
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