The $1.2bn sale of HSH Nordbank by German states Hamburg and Schleswig-Holstein to a group of private equity funds led by J.C. Flowers and Cerberus Capital has been approved by the European Commission (EC).
In late February, J.C. Flowers and Cerberus Capital along with Bawag, GoldenTree Asset Management and Centaurus Capital entered into an agreement to acquire HSH Nordbank.
The approval for the sale of HSH Nordbank was given by the Commission after its conclusion that the transaction was being executed through an open, competitive and non-discriminatory process.
Further, the transaction resulted in a positive price without the need of additional State aid, said the EC.
The commission said that the transaction is in accordance with the requirements set out in its decision made in 2016. The regulator also found that there is no aid provided to the buyers since the German commercial bank is being divested to the bidders with the highest and most credible offer.
According to the EC, HSH Nordbank under its new ownership’s business plan is anticipated to return to viability. The plan foresees a significant boost in its profitability driven by enhanced asset quality along with increased efficiency and improved cost control, thereby ensuring that the bank transitions into a solvent and viable market player.
The EC said that, in particular, the completion of the privatization will enable the bank to continue to carry out its core activities as a restructured and viable entity.
EC Commissioner Margrethe Vestager said: “The German authorities have found a sustainable solution for HSH Nordbank that avoids the need for further public support for the bank.
“On the basis of the new private owner’s business plan, HSH can become a viable market player, continuing to support economic development in Germany.”
About seven years ago, the regulator approved the bank’s restructuring, which included an asset guarantee of €10bn. The amount was reduced eventually to €7bn, in order to lower the bank’s fee payments on the guarantee.
Headquartered in Hamburg, HSH Nordbank is primarily active in the northern and metropolitan areas of Germany. The German commercial bank provides financing to energy and infrastructure projects, shipping and others.