FRANKFURT/BONN (Reuters) - Deutsche Bank (DBKGn.DE) has swooped on Deutsche Postbank DPBGn.DE in a deal worth up to $13 billion that could cement its dominance in Germany by handing it control of the country’s biggest retail lender.
It is the second bumper all-German banking deal in as many weeks after Commerzbank (CBKG.DE) bought Dresdner Bank.
But the two-stage maneuver — Deutsche will pay 2.8 billion euros ($3.92 billion) for just under 30 percent of the post-office bank now, with an option to launch a full-blown takeover later — raised eyebrows because it needs 2 billion euros from new shares and debt.
“For relatively little capital, we have secured the dominant position in Europe’s biggest economy forever,” Deutsche Bank Chief Executive Josef Ackermann told a hastily convened media conference on what could be its biggest takeover in a decade.
Investors, however, were less enthusiastic. Shares in Postbank tumbled more than 9 percent, with one trader citing confusion about the structure of the deal, with its option to increase the stake.
The prospect of raising fresh capital from the stock market sent Deutsche Bank’s stock diving 5 percent, lopping almost $2 billion off its market value.
“This is bad,” said Dirk Becker, an analyst at Landsbanki Kepler.
“I don’t know why Deutsche are doing it in the first place; it doesn’t fit. I don’t know why they are doing it for this price. It all seems to have been pretty spontaneous.”
The sale promises a windfall, however, for the shareholders of Deutsche Post (DPWGn.DE), which is surrendering control of Postbank. Its stock rose more than 4 percent at one stage.
Deutsche Bank’s move comes in the wake of investor frustration with the group’s overdependence on its now-flagging investment bank. Shareholders have been pushing for a stronger retail bank to counter the boom and bust of Wall Street.
Buying the stake in Postbank — which Ackermann decided against buying before its 2004 stock-market listing at roughly half the price he is paying now — keeps Spain’s Banco Santander (SAN.MC), which was also stalking Postbank, off its doorstep.
JP Morgan said earlier that the deal — potentially Deutsche Bank’s biggest since buying Bankers Trust — made little strategic sense and was mainly defensive.
“Deutsche Bank would not be interested in having Santander and Postbank in their back yard,” its analysts wrote.
Deutsche has been stretched as its bill from the financial crisis swelled beyond $11 billion, putting it among the top 10 global casualties of the turmoil.
It has more than 900 branches in Germany, while Postbank has 850 of its own branches plus access to thousands of post offices where it sells bank services over the counter.
Postbank is one of the few remaining retail banking prizes after Deutsche Bank was outbid by a French bank in July for Citigroup’s (C.N) small-loans business in Germany.
Editing by Sue Thomas/Will Waterman