Deutsche Post agreed on Friday to sell about 30 percent of Postbank to Deutsche Bank in a deal worth 2.8 billion euros (US$3.96 billion).
Deutsche Bank, which is heavily dependent on volatile investment banking fees, will be able to sell its real estate and investment services through Postbank’s retail network.
The transaction represents a further unwinding of what was once a mammoth German state monopoly that delivered letters, connected telephone calls and provided basic banking services.
In 1989, the German government began dividing the lumbering state monopoly into three divisions that are now the DAX-listed companies Deutsche Post, Postbank and Deutsche Telekom.
The state has long since stepped away from operational decisions at the companies and is now closer than ever to ending its links with them entirely.
The German government approved the deal through its seats on the board of Deutsche Post, in which it still owns a stake.
Deutsche Bank won the stake in Postbank despite a last-minute offer from Banco Santander for Deutsche Post’s entire stake.
Santander, based in Madrid, Spain, also hinted it would make an offer for all of Postbank.
At a news conference in Bonn, Deutsche Post chief executive Frank Appel said the government had not thrown its weight behind a German deal.
“We opted for the most attractive offer,” Appel said.
Deutsche Bank will get 29.75 percent of Postbank — a stake that lets it veto major decisions — and plans to raise 2 billion euros in capital to finance the transaction.
The deal values Postbank at 57.25 euros a share.
Deutsche Bank also obtained an option to buy another 18 percent of Postbank at 55 euros a share within three years.
In addition, Deutsche Post has an option to sell another 20.25 percent of Postbank to Deutsche Bank in the same time frame at 42.80 euros a share.
Deutsche Post owns 50 percent plus one share of Postbank.
Under securities laws, taking a stake above 30 percent would require Deutsche Bank to make an offer for all Postbank shares.
Executives said no Postbank branches would be closed, nor would there be layoffs.
However, the Postbank chief executive Wolfgang Klein said the two banks would consider whether they could achieve savings by bundling operations like real estate finances and securities sales.
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