By Tom Sims and Mathieu Rosemain
FRANKFURT/PARIS (Reuters) -French banking group Credit Mutuel Alliance Federale is buying German lender Oldenburgische Landesbank (OLB), a surprise move after the northern German bank for years considered a listing on the stock exchange.
The planned sale was announced by OLB and the French bank’s German subsidiary, Targo Deutschland, on Thursday. Neither bank disclosed financial terms. The price tag for OLB is close to 2 billion euros, two sources close to the matter told Reuters.
A direct sale to Credit Mutuel offered intrinsic value to OLB’s shareholders while sparing them the complexities of an IPO, one sources said. The acquisition, Credit Mutuel’s largest since its 2008 buyout of Citibank Germany, strengthens its foothold in Europe’s biggest economy.
Last month, the CEO of OLB, Stefan Barth, said the current market conditions to launch an initial public offering were the strongest in years, heightening expectations of a listing soon.
OLB said in a statement announcing the deal that the combination with Targo would make it the 10th largest banking group in Germany by assets.
“This acquisition is a further fundamental strategic step by Crédit Mutuel Alliance Fédérale in the implementation of its strategic plan,” Targo said.
OLB’s shareholders include Apollo Global Management, the Teacher Retirement System of Texas and Grovepoint Investment Management.
Only a handful of banks have gone public on Germany’s main exchange in Frankfurt over the last 25 years, data from the exchange operator Deutsche Boerse shows.
One of the last bank IPOs was the 2015 listing of the property lender Deutsche Pfandbriefbank.
In a sign of a wobbly IPO market, German generic drugmaker Stada this week postponed a planned IPO in Frankfurt because of market volatility.
Rothschild & Cie advised Credit Mutuel while JPMorgan advised OLB.
(Reporting by Sabine Wollrab, Tom Sims in Frankfurt, Mathieu Rosemain in ParisEditing by Ludwig Burger and David Evans)
