(Bloomberg) US investment firm Capital Group sold its stakes in two of Germany's largest banks, depriving the industry of a shareholder who has been considered a stabilizing force.
Capital Group will divest itself of Deutsche Bank AG and Commerzbank AG just weeks after selling 900 million pounds (US$1.2 billion) in Barclays Plc shares, according to people familiar with the matter. The investment firm was previously among the largest shareholders of each of the three companies, according to data from Bloomberg.
Capital Group's move comes at a time when the European banking sector is facing the double challenge of rapid inflation and a possible recession following the sanctions imposed on Russia by the war in Ukraine. Late Monday's announcement that an undisclosed investor was selling shares of Deutsche Bank and Commerzbank affected both securities, which fell by 10.8% and 9.6% respectively.
A representative of Capital Group declined to comment. Representatives of Deutsche Bank and Commerzbank said that any sale of shares by investors does not affect their respective strategies.
Capital Group acquired a large stake in Deutsche Bank in early 2020, sending a signal of confidence in the CEO, Christian Sewing, and driving the action higher. Just a month later, Capital Group also increased its stake in Commerzbank.
Los Angeles-based Capital Group is one of the largest asset managers in the world, with more than $2 trillion in assets. The firm has stakes in numerous financial companies, including PayPal Holdings Inc. and Wells Fargo & Co., according to regulatory records.
The 1.27 billion euro (US$1.4 billion) stake in Deutsche Bank was sold at a 7.9% discount from Monday's closing price, according to the terms to which Bloomberg had access. A simultaneous sale of a stake in Commerzbank raised 475 million euros with a 6.6% discount. Morgan Stanley arranged both transactions.
Original Note:
Capital Group Is Mystery Seller of Deutsche Bank, Commerzbank
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