France-based Societe Generale has agreed to acquire the equity markets and commodities business (EMC) of Commerzbank for an undisclosed price.
Image: Headquarters of Societe Generale in La Défense near Paris. Photo: courtesy of Olivier Passalacqua/French Wikipedia.
The French banking and financial services company said that the transaction is part of its strategy to further extend its global banking and investor solutions activities.
The acquisition would strengthen Societe Generale’s position in derivatives and investment solutions across asset classes.
The transaction includes the investment products, flow products, and asset management businesses of Commerzbank across the world, which had generated €381m gross revenues last year.
The activities involved in the transaction are based in Frankfurt, London, Hong Kong, Paris, Zurich and Luxembourg.
Societe Generale deputy CEO Séverin Cabannes said the EMC franchises of the two banks are complementary and present a significant potential of synergies.
Cabannes said: “In addition, while complementing Lyxor’s ETF franchise, this acquisition would be transformational for our activities in Germany as it would enable Societe Generale to reach a new scale in the leading Eurozone economy.
“Upon integration, this transaction would bring numerous benefits to clients: the reach and geographical footprint, an extended cross-asset product set, the technology and expertise from two associated leading platforms”.
For Commerzbank, the sale is part of its “Commerzbank 4.0” strategy, which is intended to reduce its overall complexity and free up capital for investment in its core franchise.
The German bank’s cash equity brokerage and commodities hedging businesses will not be part of the transaction.
Commerzbank equity markets & commodities divisional board member Roberto Vila said: “Over the last 29 years, the Equity Markets & Commodities business has grown in Commerzbank to be one of the leading European manufacturers and market makers of financial products.
“I am convinced that with Societe Generale and Lyxor, leading Derivatives and ETF Houses, we have found the right new owners for this franchise to grow, innovate and be even more successful in the future.”
The transaction is expected to be completed in the 2nd semester of 2018 should it get clearance from competent tax authorities, secure relevant approvals apart from meeting other conditions.