ABN Amro to buy German private bank in biggest deal since 2008 financial crisis

By Nilutpal Timsina, Yantoultra Ngui and Matteo Allievi

(Reuters) -ABN Amro has agreed to buy German private bank Hauck Aufhäuser Lampe (HAL) for 672 million euros ($730 million) from China's Fosun International to expand in wealth management, its largest deal since the global financial crisis.

The Dutch bank's deal comes as European lenders seek to diversify their revenues by bulking up in areas such as wealth management and private banking.

"The proposed acquisition will further strengthen our position and offer employees of the combined group the opportunity to play a driving role in the consolidating German market," ABN Amro CEO Robert Swaak said in a statement.

Germany is the largest private banking market in Europe.

The deal, announced on Tuesday, is expected to close in the first quarter of 2025 and will increase ABN Amro's assets under management by 26 billion euros and add 2 billion euros in loans.

Some of HAL's units such as those that provide alternative investment fund management or fund administration services will not be part of the acquisition.

Shares in ABN Amro were 0.6% higher in early trade on Tuesday.

J.P. Morgan analysts said some investors may have preferred if ABN Amro had used the excess capital to buy back shares - a key driver of the rally in European bank shares this year - than on acquisitions.

Market expectations for more buybacks this year and next will likely fall and the impact of the deal on profitability would be limited, they said.

"There may be more expansion ahead and given press reports of ABN's interest in other deals, there could be interest in adjacent geographies as part of ABN's strategy going forward (e.g. in Belgium)," the analysts added.

ABN Amro was nationalised during the 2008 financial crisis. The Dutch state has been gradually reducing its ownership and in November it said it was lowering its stake to around 40%.

Fosun, which is paring back its portfolio after years of expansion, said it would use the sale proceeds for general working capital.

This year, the Chinese conglomerate has stepped up efforts to streamline its assets. In April, Fosun sold a 9% stake in Belgium insurer Ageas to BNP Paribas for 730 million euros.

It is also exploring a sale of all or part of its luxury resort Atlantis in southern China as part of its efforts to reduce debt, sources have said.

Sources have also said it is open to selling its remaining 20% stake in Portugal's Millennium bcp after disposing of some shares earlier this year.

Fosun, whose businesses range from healthcare to oil and gas, acquired HAL in 2016.

($1 = 0.9206 euros)

(Reporting by Nilutpal Timsina in Bengaluru and Yantoultra Ngui in Singapore and Matteo Allievi in Gdansk; Editing by Edwina Gibbs and Sriraj Kalluvila)