BRUSSELS, Feb 21 (Reuters) - Germany's financial regulator Bafin has given approval for RHJ International's (RHJI) planned purchase of Deutsche Bank's BHF Bank more than two years after the two first entered exclusive talks, RHJI said on Friday.
Kleinwort Benson Group (KBG), a subsidiary of Belgian-listed holding company RHJI, will buy BHF for an estimated 354 million euros ($485.4 million).
RHJI announced exclusive talks to buy BHF from Deutsche Bank in June 2011, only to see Bafin refuse the deal, citing concerns about BHF's ability to withstand a crisis on its own.
The saga has raised questions about how open Bafin is to foreign bank takeover offers.
RHJI beefed up its offer in September 2012 by bringing in more investors.
KBG will acquire 91 percent of BHF for 322 million euros and RHJI will take the remaining 9 percent stake by issuing its own shares to Deutsche Bank.
RHJI will retain a 65 percent stake in KBG, with a group of co-investors made up of China's Fosun Group, BMW heir Stefan Quandt and funds controlled by U.S. investor and RHJI board member Timothy Collins holding the other 35 percent.
The acquisition will merge BHF, strong in private banking, asset management and corporate banking to Germany's mid-sized companies, with KBG, a wealth and asset management specialist. The combined group will have a sizeable presence in both Britain and Germany.
Deutsche Bank had been seeking a buyer for BHF, which it inherited in a 1 billion euro purchase of Sal. Oppenheim in March 2010.
The regulator also scotched Deutsche Bank's initial plan to sell BHF to LGT, a bank owned by the royal family of the Alpine principality of Liechtenstein. ($1 = 0.7293 euros) (Reporting by Philip Blenkinsop; Editing by David Holmes)