Samsung financial unit-led fund to buy Commerzbank tower in Germany

Commerzbank headquarters in Frankfurt, Germany / Courtesy of Commerzbank AG

By Jhoo Dong-chan

Samsung Life Insurance’s subsidiary specializing in commercial real estate investment and management has been selected as the preferred bidder to buy German Commerzbank's headquarters building in Frankfurt for about 900 billion won ($820 million), a Samsung Life Insurance official said Friday.

Other Samsung Group affiliates, including Samsung Fire & Marine Insurance and Samsung Securities, invested in the fund to buy the building ― led by subsidiary Samsung SRA Asset Management ― in a bid to take over Germany’s tallest tower that has 56 stories and is 256 meters high.

The Government of Singapore Investment Corporation and Korea Investment & Securities reportedly took part in the bidding to become preferred bidders for the takeover, but Samsung SRA Asset Management was chosen for its 900 billion won bid.

Commerzbank invested 350 billion won to buy shares of Korea Exchange Bank in the wake of the 1997 IMF financial crisis. Germany’s second-largest bank made a huge profit ― estimated at 600 billion won ― when it sold its shares to U.S.-based Lone Star Funds eight years later.

Local media outlets reported that Samsung SRA Asset Management is expected to rent the tower to Commerzbank after buying it, but an official said nothing has yet been decided.

“We have just been chosen as the preferred bidder to buy the tower,” a Samsung Life Insurance official said. “So, it is too early to say what we will do with the tower.”

Samsung SRA Asset Management, established in December 2012 as a wholly owned subsidiary of Samsung Life Insurance, seeks high-risk, high-return investments in real estate asset management.

It also took over German defense company Thales’ Stuttgart headquarters for about 230 billion in June 2014 and invested over 100 billion won in an office building in Washington, D.C. in July 2014.