Deutsche Bank to Buy Out Deutsche Postbank, Raise Cash

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Deutsche Bank (NYSE:DB) reached a deal over the weekend to scoop up Deutsche Postbank and announced plans to pay for the acquisition by raising at least 9.8 billion euros through a stock sale.

The announcement follows reports last week that Deutsche Bank planned a big stock sale, raising concerns Germany’s largest bank was short on cash.

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Deutsche Bank said it will pay 24 euros to 25 euros a share for Postbank, which it already owned 30% of. The final minimum price will be set in a week by Germany’s Federal Financial Supervisory Authority, Deutsche Bank said.

To pay for the deal, Deutsche Bank plans to raise 9.8 billion euros, or $12.5 billion, its largest stock sale ever.

Despite the stock sale, Deutsche Bank’s shares gained 3.37% on Monday amid a global rally in the financial sector in response to a lenient timetable to implement new capital ratios required by Basel III.

Deutsche Bank also said it plans to take a 2.4 billion euro charge in the third quarter to reflect the value of its stake in Postbank.

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