Deutsche Bank Said to Be Near Deal for Sal. Oppenheim Holding

By Aaron Kirchfeld

Oct. 28 (Bloomberg) -- Deutsche Bank AG, Germany’s biggest lender, is poised to buy the Luxembourg-based holding company of wealth manager Sal. Oppenheim Jr. & Cie. for about 1 billion euros ($1.48 billion), two people familiar with the matter said.

The family owners of Sal. Oppenheim will retain 25 percent in an operating unit of the asset and wealth management business in Cologne, Germany, said the people, who declined to be identified because talks are private. An agreement may be announced as soon as today after Deutsche Bank’s supervisory board meets, said the people.

Chief Executive Officer Josef Ackermann is seeking control of Sal. Oppenheim, Germany’s biggest independent private bank, to cut reliance on investment banking and bolster the asset and wealth management business. The acquisition would almost double Deutsche Bank’s assets under management in the private-wealth unit to more than 300 billion euros and add about 150 million euros in operating profit a year, according to estimates by Morgan Stanley analysts.

Spokesmen for Deutsche Bank and Sal. Oppenheim declined to comment. Die Welt yesterday reported the structure of the transaction, which the German newspaper said has tax benefits.

Sal. Oppenheim, run by the seventh generation of the same family, put itself up for sale after reporting its first loss since World War II last year from soured investments in companies such as insolvent German retailer Arcandor AG as well as derivatives and real estate. The bank in April posted a 2008 net loss of 117 million euros.

Wealth-Management Unit

Deutsche Bank is only interested in the wealth management business and Sal. Oppenheim is seeking a buyer for its investment bank. The company’s effort to sell the advisory and securities unit is focused on Macquarie Group Ltd., Australia’s biggest investment bank, and won’t be completed until after the Deutsche Bank transaction, the people said. Italy’s Mediobanca SpA previously dropped out of negotiations.

Deutsche Bank loaned 350 million euros to Sal. Oppenheim to help the wealth manager pay off loans to other banks, two people familiar with the matter said in September. The loan followed 300 million euros in financing provided by Deutsche Bank in August that the wealth manager used to raise capital. Deutsche Bank received Sal. Oppenheim shares as collateral, paving the way for a stake purchase, the people said.

Sal. Oppenheim says it became Europe’s largest independent bank after its 2004 purchase of BHF-Bank from ING Groep NV for 600 million euros. The company, which employs about 4,000 people, traces its roots to a commission and exchange house founded in 1789 by Salomon Oppenheim Jr.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net