Fortis, ABN AMRO and Deutsche Bank (XETRA: DBKGN.DE/ NYSE:DB) announced today that they have signed an agreement by which Deutsche Bank will acquire from ABN AMRO parts of its commercial banking activities in the Netherlands for EUR 709 million in cash.
The businesses to be acquired by Deutsche Bank are part of ABN AMRO Business Unit Netherlands (BU NL) and include two corporate client units that provide a range of financial services to large corporate clients; 13 commercial advisory branches that serve medium-sized clients; parts of the well-known Rotterdam-based bank Hollandsche Bank Unie N.V.; and the factoring services company IFN Finance B.V., the Dutch part of ABN AMRO’s factoring unit IFN Group Finance.
The sale of the businesses to Deutsche Bank is in line with the commitments that Fortis made to the European Commission (EC) on 3 October 2007 aimed at addressing the EC’s concerns regarding concentration in the Dutch banking market resulting from Fortis’ acquisition of certain ABN AMRO assets.
The businesses to be acquired serve over 35,000 commercial business clients as well as 8,000 private clients and employ 1,400 people. The terms and conditions of the sale are such that ABN AMRO will provide initial credit risk coverage for around EUR 10 billion of Risk Weighted Assets (RWAs). The capital required for this credit risk coverage will be released over time.
The businesses concerned produced pro forma full year 2007 pre-tax profits of approximately EUR 140 million. The sale price represents a discount of approximately EUR 300 million to the businesses’ net asset value, as previously communicated by Fortis in its statement of 26 June 2008.
Josef Ackermann, Chairman of the Management Board and the Group Executive Committee at Deutsche Bank, said: “This investment is another important step in our bank’s strategy to continue growing its stable businesses.”
Michael Cohrs, head of Global Banking at Deutsche Bank, said: “We believe that by combining Deutsche Bank’s diverse product offering, technology edge and capital strength with parts of ABN AMRO’s unrivalled Dutch client base, we will be able to offer corporate banking clients in the Netherlands an outstanding level of service.”
Deutsche Bank, which is already a leading corporate and investment bank in the Netherlands, will become the fourth-largest provider of corporate and investment banking services in the country upon completion of the transaction, complementing its strong global position. At completion, the businesses to be acquired will use the Deutsche Bank brand name and become part of the firm’s Global Transaction Banking business.
Jean-Paul Votron, Chief Executive Officer of Fortis Group, said: “We have reached a key milestone. The sale of these parts of ABN AMRO Business Unit Netherlands (BU NL) is an essential step in the completion of Fortis’s acquisition of certain ABN AMRO assets. We will now be able to proceed with the integration of the acquired activities on schedule and to start realizing the synergies identified as a result of this acquisition.”
Upon completion of the transaction, in compliance with EC requirements and subject to approval from local regulators, integration of various international private banking activities and certain specialised activities from ABN AMRO into Fortis will start. The combined forces of Fortis and ABN AMRO will result in an expanded commercial banking network and more innovative product development opportunities, and will give customers direct access to expertise with a strong local presence.
Fortis and ABN AMRO will ensure that the interests of employees and clients are represented during the period prior to completion. Clients’ contacts will remain unchanged, and they will be kept informed of all relevant developments.
The transaction’s closing date is anticipated at the beginning of the fourth quarter. The transaction is subject to several authorisations of De Nederlandsche Bank, the approval by the EC and other regulatory bodies.
This release contains forward-looking statements. Forward-looking statements are statements that are not historical facts; they include statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and projections as they are currently available to the management of Deutsche Bank. Forward-looking statements therefore speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
By their very nature, forward-looking statements involve risks and uncertainties. A number of important factors could therefore cause actual results to differ materially from those contained in any forward-looking statement. Such factors include the conditions in the financial markets in Germany, in Europe, in the United States and elsewhere from which we derive a substantial portion of our trading revenues, potential defaults of borrowers or trading counterparties, the implementation of our management agenda, the reliability of our risk management policies, procedures and methods, and other risks referenced in our filings with the U.S. Securities and Exchange Commission. Such factors are described in detail in our SEC Form 20-F of 26 March 2008 under the heading "Risk Factors." Copies of this document are readily available upon request or can be downloaded from www.deutsche-bank.com/ir .
Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 78,275 employees in 76 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people. More information is available at www.db.com
Fortis is an international provider of banking and insurance services to personal, business and institutional customers. We deliver a total package of financial products and services through our own high-performance channels and via intermediaries and other partners. Fortis ranks among Europe’s top 20 financial institutions. Together with ABN AMRO, we have a presence in over 50 countries and a dedicated, professional workforce of more than 85,000. All this makes us a leader in financial services in Europe, a top 3 private banker and a top tier asset manager. More information is available at www.fortis.com.
Netherlands-based ABN AMRO is a leading international bank with total assets of EUR 1,025.2 billion (as at
31 December 2007). ABN AMRO was acquired by the Consortium of RBS, Fortis and Santander in October 2007 and its various businesses are being divided among the three banks in line with their strategic priorities. Further details regarding the acquisition and ABN AMRO’s transition can be found on the website www.abnamro.com/future or the websites of the Consortium banks: www.rbs.com, www.fortis.com and www.santander.com.