VIENNA (Reuters) - BAWAG PSK, the Austrian bank owned by private equity group Cerberus Capital Management, bought German regional lender Suedwestbank for an undisclosed price to expand its network in western Europe, BAWAG said on Monday.
Suedwestbank is majority owned by a holding company for twin brothers Andreas and Thomas Struengmann, billionaires from their sale of generics drugmaker Hexal to Novartis in 2005. It has around 100,000 retail and corporate customers in the prosperous Baden-Wuerttemberg province around Stuttgart.
Suedwestbank has total assets of more than 7 billion euros ($8.02 billion) and 650 staff in its 28-branch network that combines traditional lending with asset and wealth management. It made a 2016 operating profit before tax of 79 million euros.
Unlisted BAWAG, Austria's fourth-biggest bank, has more than 2.2 million customers and 40 billion euros in assets. It has said for years it was on the lookout for takeovers -- especially in Austria, Germany and Switzerland -- to expand.
Reuters reported in May that BAWAG planned to buy the German bank.
"The expertise and long-standing tradition of Suedwestbank, which operates in a very strong economic region of Germany, make the bank an ideal partner to help us expand our footprint and customer base," said BAWAG Chief Executive Anas Abuzaakouk.
The sale is due to close in 2017 and is subject to regulatory approvals. The banks said they agreed not to disclose the purchase price or any details of the agreement.
Cerberus owns 52 percent of BAWAG and GoldenTree Asset Management 40 percent. BAWAG has been on the takeover trail, with five other deals over the past 18 months. In February its easybank direct bank agreed to buy the PayLife commercial card issuing business of SIX Payment Services Austria.
Unlike other Austrian banks that expanded heavily in central and eastern Europe, BAWAG focuses on Austria, where it holds two-thirds of its customer loan book. It also does retail,
corporate, commercial real estate and portfolio lending in western Europe and the United States.
BAWAG is also moving ahead with preparations for an initial public share offer that could value it at up to 5 billion euros.
Reporting by Shadia Nasralla; Editing by Adrian Croft