Corealcredit Bank to retain autonomy following €342m takeover by Aareal

Germany’s Corealcredit Bank will remain an independent subsidiary after its takeover by Aareal Bank in the next few months. After almost a year of negotiations, Aareal Bank has acquired the smaller German lender from Lone Star for €342m, subject to contractually agreed adjustments until the closing date.

Corealcredit focuses on German commercial real estate lending and has €7.6bn of assets. Aareal’s full-year results, out next month, are expected to show that it increased its loan book to €25bn up to the end of 2013, after completing an expected €8bn of new lending in the past 12 months.

The Corealcredit deal is a rare example of Aareal growing by acquisition. The bank is not now expected to pursue WestImmo, which is up for sale again, as Real Estate Capital revealed October WestImmo is owned by Erste Abwicklungsanstalt, the German government agency winding up the problem assets of West-Immo’s parent, West LB.

Pimco is the favourite to buy WestImmo, which had reduced its outstanding loan book to €11.8bn by last September. Another bidder is thought to be ING, which is expanding real estate lending again in markets where it has a funding base from deposits – Germany and Poland as well as the Netherlands.

Aareal will use its own resources to entirely finance the CorealBank deal, which it said would be earnings-per-share accretive from the first year.