RHJ forks out for Kleinwort Benson deal

GERMANY&rsquo;S Commerzbank reached agreement to sell its UK private bank Kleinwort Benson to Belgian investment firm RHJ International for &pound;225m in cash yesterday.<br /><br />The sale comes after Commerzbank was told by the European Commission to sell the division as a condition of approval for the &euro;18.2bn (&pound;16.7bn) it has received in state aid from Berlin.<br /><br />The deal is expected to complete in the first quarter of 2010, the company said, handing RHJ &ndash; which failed last month in a bid to buy General Motors&rsquo; European operations including Opel on the continent and Vauxhall in the UK &ndash; a ready-made private bank.<br /><br />RHJ chief executive Leonhard Fischer said: &ldquo;RHJ plans to adopt Kleinwort Benson as an overarching brand for its financial services businesses going forward.&rdquo;<br /><br />The deal is now subject to approval by European anti-trust and supervisory authorities.<br /><br />Commerzbank has already sold off several private banking units this year, as part of its commitment to the EC to shrink operations to allay competition concerns following its receipt of state aid.<br /><br />&ldquo;The investment banking business of Commerzbank remains unaffected by this transaction,&rdquo; the German bank said.<br /><br />Kleinwort Benson, which traces its roots back to the 18th century, had assets under management totalling &pound;5.4bn and assets under administration of &pound;15.7bn as of the end of 2008, employing around 650 staff.<br /><br />The purchase is something of a coup for RHJ, founded by Timothy Collins, which has failed in recent bids not only for Opel, but also for German business lender IKB, South Korea&rsquo;s Daewoo Electronics and US kitchen appliance maker Maytag.<br /><br />The sale brings to an end speculation over the future of Kleinwort Benson, whose advisers Goldman Sachs are understood to have received interest from Close Brothers and at least nine other bidders.<br /><br />Commerzbank acquired the company with its acquisition of Dresdner Bank from Allianz in January.<br /><br /><strong>KLEINWORT BENSON A HISTORY</strong><br />Kleinwort Benson will be remembered for its high profile in the City and some of the City players who have worked for it. These include London Stock Exchange chief executive Xavier Rolet, former Bank of England deputy governor Sir David Clementi and former vice-chairman, the late Sir Nicholas Redmayne (left).<br /><br />But the firm can trace its roots back to 18th century Germany, where the 24-year-old Hinrich Kleinwort set up a partnership to finance trade with England. That same year saw Robert Benson partner up with William Rathbone IV to form Rathbone &amp; Benson and the two firms merged centuries later to create the private bank Kleinwort Benson in 1961.<br /><br />The bank grew steadily throughout the 1960s as the volume of mergers and acquisitions increased and by the end of the decade it was working on the largest tie-ups of the era, including the merger of Cadbury and Schweppes.<br /><br />The 1980s saw Kleinwort Benson hired to manage a series of high-profile transactions, including the privatisation in 1981 of British Aerospace and the sale in 1984 of the government&rsquo;s stake in British Telecom.<br /><br />The firm was bought in 1986 by one of its clients Grievson Grant, which sold it on in 1995 to Dresdner Bank, creating Dresdner Kleinwort.<br /><br />The acquisition of Dresdner Bank by Commerzbank saw the parent company retire the Kleinwort Benson brand altogether.<br />