Dusseldorf-based banking group WestLB has said that the opening of merger talks with BayernLB will not influence ongoing discussions about the sale of WestLB's dedicated real estate lending unit Westimmo.
Dusseldorf-based banking group WestLB has said that the opening of merger talks with BayernLB will not influence ongoing discussions about the sale of WestLB's dedicated real estate lending unit Westimmo.
Speaking to PropertyEU, a spokesman for WestLB said the two processes are being dealt with entirely separately. Talks are ongoing with two potential bidders for Westimmo. WestLB has not named the bidders but it has been widely reported that they are German property lender Aareal and private equity fund Apollo Management.
Both the sales process and the merger talks have been triggered by demands from the European Commission. WestLB and BayernLB are two of the largest German publicly owned Landesbanks and both have required bailouts totalling billions of euros from the German bank stabilisation fund Soffin.
The European Commission, which is examining bank bailouts in several countries, has set two conditions for WestLB. These are that it sell itself by the end of 2011 and dispose of Westimmo before the end of this year.
WestLB and BayernLB jointly announced on Monday that they will explore the possibility of a merger over the next few months. They aim to have a joint understanding by the end of the year on the merits of a merger. 'Given the number of complex issues, it remains open if the talks will ultimately be successful,' the banks said.
The banks are working on the assumption that the savings banks, the German government, Soffin and the European Commission will 'constructively assist in examining and resolving open issues'.