Reuters: Mergers News: Deutsche Bank says Actavis deal shores up capital

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Deutsche Bank says Actavis deal shores up capital Apr 25th 2012, 21:00 FRANKFURT, April 25 | Wed Apr 25, 2012 5:00pm EDT FRANKFURT, April 25 (Reuters) - Deutsche Bank said it will raise its core tier one capital position by 290 million euros ($382 million) thanks to drug maker Watson's purchase of Actavis, making the lender a beneficiary of the deal. Transferring de facto ownership of Actavis from Deutsche Bank, which has billions in debt exposure to the Swiss generic drugmaker, to U.S.-based Watson allows the bank to free up a capital buffer it was forced to set aside to cover for potential Actavis losses. The sale triggered an impairment charge of 257 million euros in the first quarter but overall the deal will have a net positive impact on Deutsche Bank's core tier 1 capital ratio of about 0.06 percentage points in 2012, the lender said on Wednesday. "This further demonstrates the Group's commitment to reducing non-core legacy positions and associated risk in a capital efficient manner," it said in a statement. At the end of 2011, the bank's core tier one capital ratio stood at 9.5 percent. Germany's flagship lender was left holding billions of euros of Actavis debt after financing a leveraged buyout in 2007 by Icelandic tycoon Bjorgolfur Thor Bjorgolfsson. Deutsche, which is due to unveil first-quarter earnings on Thursday, already took a 400 million euro impairment charge on Actavis in the fourth quarter. Watson said earlier on Wednesday it agreed to buy Actavis for at least 4.25 billion euros, in a deal that cements its status as one of the world's biggest suppliers of generic drugs. Link this Share this Digg this Email Reprints

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