Fosun buys German bank

HONG KONG: Fosun International Ltd will buy German private bank Hauck & Aufhäuser Privatbankiers for up to €210 million ($231 million) in an agreed deal, the companies said on Wednesday, the first Chinese takeover of a German bank.

The Chinese conglomerate said the acquisition would enhance its banking and asset management capabilities, expand its financial markets and fund custody services, and allow it to better access other business opportunities in Europe.

“Fosun is not only interested in the current business model of H&A, rather, there is also the possibility to internationalise further,” said Jochen Lucht, partner at H&A, in a conference call with journalists.

Small German wealth managers like Berenberg Bank, MM Warburg and Metzler have faced competitive pressure from the country’s large savings- and cooperative bank sectors which have made large inroads into the business with wealthy clientele.

Switzerland’s large wealth managers like UBS AG and Credit Suisse Group AG have reduced their presence in Germany since the financial crisis.

The purchase adds to Fosun’s presence in Germany, where it already owns a nearly 20% stake in BHF Kleinwort Benson, parent company to German merchant bank BHF.

BHF-Bank saw the sudden departure of its chief executive in June due to differences in strategy and leadership of the merchant bank, triggering a sharp rebuke from Fosun, which said it “vigorously” opposed the change at the bank’s helm.

H&A supervisory board chairman Wolfgang Deml, however, played down the possibility that Fosun intended to combine the two banks in any way.

“I can’t imagine what a common strategy with BHF-Bank could look like,” he said.

The offer has been accepted by Hauck & Aufhaeuser shareholders, comprised mostly of wealthy families who represent about 80% of the share capital. The deal must still win approval from regulators in Germany, Luxembourg, Switzerland and Liechtenstein.

H&A manages some €37 billion in client assets and posted a profit of €4.7 million in 2014 compared to €7 million in 2013.