Signa to take 75% stake in two Karstadt businesses

Signa Holdings, the investment vehicle of Austrian businessman Rene Benko, is taking a 75.1% stake in Karstadt Premium Group and Karstadt Sports.

The German competition authorities have yet to authorise the transaction, which will lead to a capital injection of €300 mln to 'secure Karstadt's future development,' Signa said in a statement.

Karstadt Premium is the operating company of the three legendary luxury stores KaDeWe in Berlin, Alsterhaus in Hamburg and Oberpollinger in Munich. Karstadt Sports operates 28 specialised sport outlets in Germany.

Berggruen Holdings, the investment vehicle of billionaire Nicolas Berggruen, will maintain its 24.9% stake in Karstadt Premium Group and Karstadt Sports as well as 100% of the core business with another 83 department stores.

The new equity will be used for the ongoing 'Karstadt 2015' strategy which will involve modernising the individual Karstadt department stores.

Signa managing director Christoph Stadlhuber said: 'The takeover of the Karstadt Premium and Karstadt Sports businesses boosts Signa to one of the leading companies for inner-city retailing in top locations in Germany. The whole Karstadt Group will benefit from our investment and the ongoing successful path 'Karstadt 2015' will be further fuelled and can be executed.'

Signa owns a real estate portfolio valued at more than €5 bn in Europe. Within the last two years Signa acquired a portfolio of 20 department stores, including Berlin's KaDeWe' in city centre locations in Germany worth €1.5 bn.