FRANKFURT (Reuters) - German public sector bank Helaba is buying the German unit of Franco-Belgian lender Dexia for 352 million euros ($398 million), the lenders said in a joint statement on Friday.
Helaba beat peers including property lender Aareal Bank (ARLG.DE), which submitted an offer for the Dexia unit that has equity of 628 million euros and total assets of 18.9 billion euros.
Dexia, which was bailed out in 2011 when its credit dried up, is still backed by guarantees from the governments of Belgium, France and Luxembourg and has been trimming assets, including selling its Israeli subsidiary last month.
“The sale of Dexia Kommunalbank Deutschland is an important milestone in the orderly resolution of the Dexia Group,” Dexia Chief Executive Wouter Devriendt said in the statement. After the sale of the Israeli business and the closure of Dexia’s branch in Portugal, the German deal will further reduce Dexia’s balance sheet by 15 percent, he said.
The deal will give Helaba, whose clients are mostly German companies and savings banks, a book of municipal loans.
Dexia was once the world’s largest lender to municipalities and governments but has been left holding a large pile of outstanding bonds and loans which it is now unwinding.
Last month, Dexia Israel Bank DXIL.TA accepted an offer to be acquired by Israel Discount Bank (DSCT.TA) for $181 million.
Reporting by Arno Schuetze; Editing by Thomas Seythal and Susan Fenton