Yves Herman/ReutersPrecision Capital, a Qatari-backed firm based in Luxembourg, agreed to buy KBL European Private Bankers for $1.4 billion.
Qatari investors are on the hunt for deals across Europe after agreeing to buy the private bank operations of the troubled European firms Dexia and KBC Group.
The deals mirror similar moves in 2008, when banking heavyweights like Barclays and UBS turned to Mideast sovereign wealth funds for huge infusions of cash to recapitalize their operations after Lehman Brothers collapsed.
On Monday, Precision Capital, a Qatari-backed firm based in Luxembourg, agreed to buy KBL European Private Bankers for $1.4 billion. The figure is $400 million less than a previous offer from the Hinduja Group of India, which fell through in March for regulatory reasons.
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The sale will provide $950 million in extra capital for KBC, which has the highest market capitalization among Belgian banks. KBC is also looking to sell its majority stakes in two Polish firms, Kredyt Bank and the insurance company Warta.
“This agreement marks a crucial step in implementing our refocus strategy,” the KBC chief executive, Jan Vanhevel, said in a statement. “The agreement will allow KBC to release a significant amount of capital, to reduce our risk profile and to further strengthen our focus” on Belgium and Central and Eastern Europe.
Yves Logghe/Associated PressQatari investors agreed to buy Banque Internationale a Luxembourg, Dexia’s Luxembourg-based private bank.
In another deal, Qatari investors agreed to buy Banque Internationale à Luxembourg, Dexia’s Luxembourg-based private bank, Luc Frieden, the country’s finance minister said on Monday. The size of the deal was not disclosed, but Luxembourg’s government also plans to invest $204 million as a minority investor, Frieden added.
The news comes after the beleaguered Dexia agreed to be broken up, and the Belgian government announced plans to buy the bank’s domestic retail division for $5.4 billion. France, Luxembourg and Belgium are also to provide $122 billion in funding guarantees for the bank over the next decade.
The deals are the latest in a number of European acquisitions involving Qatari investors.
In August, Paramount, the fund of the Qatari royal family, invested $685 million in the merger of Alpha Bank and Eurobank of Greece, with Qatar’s sovereign wealth fund owning a small share.
Qatar’s interest in Europe goes beyond financial services. On Oct., Qatar Holding, a subsidiary of the country’s sovereign wealth fund, paid $740 million for a 10 percent stake in European Goldfields, which is developing gold mines in Greece.
Article source: http://dealbook.nytimes.com/2011/10/11/qatar-bets-on-hobbled-european-banks/?partner=rss&emc=rss
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