VIENNA, July 6 (Reuters) - German asset manager Union Investment has bought most of the remaining assets of Austria's Volksbanken as the part-nationalised group winds down after failing European bank stress tests.
Volksbanken, crushed in the financial crisis after a break-neck expansion into eastern Europe, closed as a bank on Friday and became a "bad bank" called Immigon, with the sole purpose of winding down 7 billion euros ($7.75 billion) worth of assets.
Union Investment will buy all of Immigon's Volksbank Invest Kapitalanlagegesellschaft and 94.5 percent of its Immo Kapitalanlage units. Both businesses have around 5.4 billion euros of assets under management, Union Investment said.
The deal was signed on July 3 and is expected to close in the third quarter of this year, pending approval by Austria's FMA financial watchdog.
Reuters reported Union Investment's acquisition on Sunday, with one source saying that the German group would pay a mid-double-digit million euro sum for the Austrian businesses.
Volksbank Invest will continue to operate under the Union Investment brand, while Immo KAG will likely keep its own name, Union Investment said in a statement, adding both groups will allow clients access to the German group's funds.
$1 = 0.9034 euros Reporting By Angelika Gruber and Kathrin Jones in Frankfurt, writing by Shadia Nasralla