Germany is set to see another major consolidation in its banking sector with the biggest private bank, Deutsche Bank, poised to buy into the country's biggest retail bank Postbank, German media said on Friday.
According to the Handelsblatt daily, the supervisory board of Deutsche Post, Postbank's parent, is due to approve the sale of a stake of 29.75 percent to Deutsche Bank for about 2.7 billion euros on Friday.
Deutsche Bank is also expected to buy another 20 percent stake in Postbank up until 2011, the German daily Sueddeutsche Zeitung quoted sources close to the negotiations as saying.
The two German banks have been negotiating a deal intensively during the past few weeks with Spanish bank Santander also showing its interest in acquiring Postbank. The German government, however, favors an all-German solution to prevent the once state-owned Postbank from falling into foreign hands.
Meanwhile German Finance Minister Peer Steinbrueck said Thursday that the government favored more consolidation in the fragmented German banking market.
"There's no alternative to consolidation in the German banking sector," Steinbrueck told a banking conference in Frankfurt on Thursday. "We need to do this to stay competitive and to be able to gain access to the benefits of international capital markets."
The nearly certain deal between Deutsche Bank and Postbank follows just two weeks after Germany's second-largest bank by assets, Commerzbank bought Dresdner Bank, the third-largest, for 9.8 billion euros. In July France's Credit Mutuel agreed to take over Citibank's German business for 4.9 billion euros.