Fosun backs RHJ acquisition of Deutsche's BHF unit

RHJ - through its wholly-owned subsidiary Kleinwort Benson Group (KBG) - will acquire 100% of BHF for EUR384 million ($498.5 million) in cash.

The deal will be funded by an associated capital increase in KBG, provided by  Fosun and other investors including German entrepreneur Stefan Quandt, US investor Timothy C. Collins, and BlackRock Investment Management. Upon completion, RHJ will remain the majority shareholder in KBG, with a stake of approximately 60%.

"The signing is very positive news for our clients and the bank. We are happy that the group of prestigious investors from all over the world confirms the attractiveness of our business model," Björn H. Robens, spokesman of BHF's board, said in a statement. "This reflects the quality of our bank and shows the excellent prospects seen for our bank as a modern partner for companies and entrepreneurs."

The sell-down of BHF - which provides wealth management, asset management and investment banking services - is part of a wider effort for Deutsche Bank to downsize its assets and costs. The transaction is expected to help reduce risk-weighted assets by EUR2 billion, resulting in capital gains of EUR75 million.

The deal is subject to regulatory approval. In March, Germany's financial regulator blocked an agreement between RHJ and Deutsche Bank, citing concerns about RHJ's funding. Last year, the regulator prevented Deutsche Bank from selling BHF to LGT, a bank owned by the Liechtenstein royal family.

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