Aareal Bank will keep WestImmo’s Mainz headquarters for at least three years along with “a significant number of jobs… at least in the medium term” following the completion of its €350m purchase of its former rival.
Aareal said “a significant number of jobs at WestImmo will be kept”, regardless of “the extensive integration planned”. WestImmo has about 200 staff in Germany and 15 in London.
Aareal, headquartered in Wiesbaden just 10 minutes across the Rhein from WestImmo, announced in February that it had agreed to buy the real estate lender to strengthen its own property finance business.
The deal was completed yesterday with the vendor, the bad bank Erste Abwicklungsanstalt, to which WestImmo was transferred by its parent company, West LB, in 2012.
“Discussions will shortly take place with the competent bodies about the future strategic focus of the new subsidiary, which apart from renewals is no longer active on the market itself on account of EU requirements since 2012,” said Aareal.
“These discussions will for instance cover the possible inclusion of WestImmo in Aareal Bank’s new business activities and the settlement of existing overlaps in the location network.”
The €350m deal reflects a discount to WestImmo’s €500m equity, and Aareal will book the €150m difference as a one-off profit. Aareal said it would still “significantly” exceed regulatory requirements on equity and liquidity after the deal, including its medium-term target of 10.75% for its tier 1 common equity.