German lender Deutsche Bank AG (DB: Quote) on Wednesday ended its exclusive talks with U.S. financial services company Guggenheim Partners after failing to reach an agreement over a potential sale of its global alternative asset management unit, RREEF. The companies were unable to agree on terms for the sale of the business and mutually agreed to end exclusive negotiations.
Deutsche Bank put its global asset management business on the block in mid-December 2011 following a strategic review of Deutsche Asset Management in November. It was looking for a price tag of about 2 billion euros, or $2.61 billion.
About 50 parties had initially evinced interest in the business at the time, including Wells Fargo & Co. (WFC), Royal Bank of Canada (RY, RY.TO), and Ameriprise Financial Inc. (AMP).
Deutsche Bank agreed in mid-May to enter into exclusive discussions with Guggenheim Partners on a potential sale of RREEF. Both the Bank and Guggenheim Partners also mutually agreed then to conclude exclusive negotiations relating to a potential sale of DWS Americas, DB Advisers, and Deutsche Insurance Asset Management.
The bank, which began a strategic review of its global asset management unit on November 22, said the review did not include DWS franchise in Germany, Europe and Asia, which the Bank had already determined was a core part of its retail offering in those markets.
RREEF is an alternative asset manager with about 46 billion euros in funds, and its U.S. asset management business manages more than 200 billion euros, including 40 billion euros in retail assets.
Europe's banks are forced to sell their asset management businesses as part of efforts to bolster their balance sheets ever since the financial crisis hit in 2008. British banking giant Barclays plc (BCS) sold off Barclays Global Investors unit to U.S. asset manager BlackRock Inc. (BLK) in 2009.
In early December, the European Banking Authority or EBA warned Deutsche Bank for the capital shortfall of 3.2 billion euros to achieve EBA's 9 percent Core Tier 1 capital ratio benchmark and urged it to address the issue by the end of June 2012.
DB closed Wednesday's regular trading session at $36.76, up $0.35 or 0.96% on a volume of 2.48 million shares. Meanwhile, it closed on Frankfurt's Xetra at 28.92 euros, up 0.31 euros or 1.07% on a volume of 4.95 million shares.
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by RTT Staff Writer
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