ABN Amro, a Dutch bank, has struck a deal to purchase German private bank Hauck Aufhuser Lampe (HAL) from Fosun International of China for 672 million euros ($730 million). This acquisition represents ABN Amro's largest deal since the global financial crisis and underscores its strategic focus on expanding in wealth management.
The move aligns with a broader trend among European lenders to diversify their revenue streams by strengthening their presence in areas such as wealth management and private banking.
ABN Amro CEO Robert Swaak expressed confidence in the acquisition, highlighting its potential to bolster the bank's position in the consolidating German market and provide opportunities for employees of the combined entity.
Germany stands out as the largest private banking market in Europe, making it an attractive target for expansion.
The deal, announced on Tuesday, is slated to close in the first quarter of 2025. It is expected to boost ABN Amro's assets under management by 26 billion euros and add 2 billion euros in loans. However, certain units of HAL, such as those offering alternative investment fund management or fund administration services, will not be included in the acquisition.
Shares in ABN Amro saw a slight uptick of 0.6% in early trading on Tuesday following the announcement.
J.P. Morgan analysts noted that while some investors may have preferred share buybacks, the acquisition aligns with ABN Amro's strategic objectives. They anticipate that market expectations for buybacks may adjust in response to the deal, but its impact on profitability is expected to be limited.
Looking ahead, analysts speculate that ABN Amro may pursue further expansion, potentially targeting adjacent geographies like Belgium as part of its growth strategy.
ABN Amro, which was nationalized during the 2008 financial crisis, has seen gradual divestment of Dutch state ownership. Fosun, meanwhile, intends to utilize the proceeds from the HAL sale for general working capital, as part of its broader efforts to streamline its portfolio and reduce debt.
Earlier this year, Fosun sold a significant stake in Belgium insurer Ageas to BNP Paribas and is reportedly exploring the sale of its luxury resort Atlantis in southern China. It has also indicated openness to divesting its remaining stake in Portugal's Millennium bcp.
Fosun initially acquired HAL in 2016 and is now refocusing its efforts after years of expansion across diverse sectors including healthcare, oil, and gas.
