Deutsche Bank buys stake in German post office bank

Move comes just two weeks after Commerzbank agreed to take over struggling rival Dresdner for just under €10bn

The battle for supremacy in Germany's retail banking sector intensified today when Deutsche Bank agreed to pay €2.8bn (?2.23bn) cash for a 29.75% stake in Deutsche Postbank, the post office bank.

Germany's biggest bank also won first right of refusal to completely take over Postbank which has 14.5 million customers in Germany. Deutsche Bank has 9.7 million customers in its home country.

Its move comes just two weeks after Commerzbank agreed to take over struggling rival Dresdner for just under €10bn, creating Germany's biggest retail bank in a crowded sector dominated by small, state-owned savings institutions.

Deutsche Bank, which is paying €57.25 a share for its initial minority holding, said it would raise €2bn in fresh capital to finance the deal - but left the timing open in view of continuing market turmoil.

It had secured two variants of an option to acquire either a further 18% for €55 a share or 20.25% plus one share for €42.80 a share. One or other of these can be exercised within 12 to 36 months after the initial holding is completed - early next year, according to Deutsche Bank.

Deutsche Post, which is 69% in private hands, has been seeking to offload its bank for some time. Frank Apperl, chief executive, said today: "This transaction provides stability to Postbank and helps it realise its ambitious growth targets which we will continue to support in future."

Josef Ackermann, Deutsche Bank chief, said his bank had acquired a substantial shareholding in a leading retail bank on "attractive" terms.

Source: Guardian.co.uk