US private equity group Lone Star is to take over IKB, the German bank rescued by the state development bank KfW after collapsing because of the sub-prime mortgage crisis.
Lone Star is to buy KfW's 91% stake in IKB. Details of the price were not disclosed.
IKB, a specialist in loans to small and medium-sized businesses, invested heavily in assets linked to high-risk US mortgages.
When US homeowners began defaulting on these home loans, these securities plunged in value and cost banks around the world hundreds of billions of dollars as they wrote off their investments.
In Germany, the first and biggest casualty was IKB. To prevent it going bankrupt it was bailed out to the tune of several billion euro gathered by the government, KfW and private German lenders.
Lone Star saw off other bids from Swedish bank SEB and fellow US private equity group Ripplewood, reports said.
