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CMS advises Federal State of Lower Saxony on capital strengthening and realignment of NORD/LB

07/02/2019

Hamburg – Following a bidding process lasting several months and attracting interest from both the private and public sector, the state government of Lower Saxony has decided to continue negotiations with the German Savings Banks Association (DSGV) and the other owners of NORD/LB regarding an agreement on joint capital strengthening and realignment of NORD/LB. On 28 January 2019, DSGV’s governing bodies also decided to enter into a related agreement with the current owners of the bank on joint capital strengthening and realignment of NORD/LB. This provides for a capital injection by the various savings bank organisations totalling EUR 1.2 billion and a total of up to EUR 1.5 billion from the federal state, as well as further measures to strengthen the bank’s capital ratios. In the course of this capitalisation, the shareholdings in NORD/LB will be adjusted, NORD/LB will be realigned and placed on a sustainably profitable footing, in part through eliminating risk exposures such as ship financing. The proposal has yet to be agreed with the two relevant regulatory authorities, the ECB and BaFin, as well as the European Commission.

A CMS team headed by lead partners Dr Christian von Lenthe and Dr Henrik Drinkuth advised the Federal State of Lower Saxony on all aspects of the bidding process, on the negotiations with the DSGV and on the capital strengthening and realignment of NORD/LB. The team has previously acted on behalf of the Federal State of Lower Saxony on several occasions, including on Volkswagen’s acquisition of Porsche.

NORD/LB (Norddeutsche Landesbank) has headquarters in Hanover, Braunschweig and Magdeburg and describes itself as a leading German commercial bank, with total assets of EUR 154.8 billion. Its core business segments include structured finance in the energy and infrastructure sector, ship and aircraft finance, corporate client business, commercial real estate finance, capital market business and private and commercial client business, including private banking. In the autumn of 2018, NORD/LB launched a formal bidding process after the sale of shipping loans gave rise to a need for new equity capital at the public-sector bank. The principal owners of NORD/LB are the federal states of Lower Saxony and Saxony-Anhalt, which together hold two thirds of the bank.

CMS Germany

Dr Christian von Lenthe, Lead Partner
Dr Henrik Drinkuth, Lead Partner
Charlotte von der Heydt-von Kalckreuth, Senior Associate
Dr Anja Wiedemann, Senior Associate
Dr Frederike Volkmann, Senior Associate, all Corporate / M&A
Dr Joachim Kaetzler, Partner
Dr Thomas de la Motte, Partner
Andrea München, Partner
Barbara Bayer, Senior Associate
Laura Bungart, Associate
Ivonne Kahlke, Associate, all Banking & Finance
Dr Michael Bauer, Partner
Roxana Mina Kruse, Associate
Dr Marta Vejseli, Associate, all Competition & EU
Dr Heino Büsching, Partner
Dr Isabelle Holly, Counsel
Dr Toufic Schilling, Associate, all Tax
Dr Hermann Müller, Partner
Dr Rajiv Chandna, Counsel
Dr Jan Niklas Gestefeld, Senior Associate, all Real Estate & Public
Jürgen Siemers, Partner
Dr Philipp Nonnenmühlen, Associate, both Labor, Employment & Pensions

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