Munich Mayor Says Bavaria Wrongly Joined $3.3 Billion GBW BuyoutDalia Fahmy
Munich Mayor Christian Ude accused the Bavarian government of unlawfully helping to fund the 2.5 billion-euro ($3.3 billion) purchase of 32,000 apartments and asked European Union regulators to halt the sale.
Ude told EU Competition Commissioner Joaquin Almunia in a letter mailed today that Bavaria contributed 50 million euros to a group offer led by Patrizia Immobilien AG to buy Bayerische Landesbank’s GBW residential property unit, according to Ulrich Meyer, the mayor’s spokesman. That violates EU state-aid rules, Ude said in the letter, Meyer added.
No one at the Bavarian Finance Ministry was immediately available for comment. A spokesman at Patrizia declined to comment.
Ude’s letter may complicate what would be Germany’s biggest property deal in five years. Patrizia led a group of investors who agreed to buy the Bavarian apartments from GBW for 882 million euros excluding debt, according to statements from Patrizia and BayernLB on April 8.
Patrizia beat at least four other bidders, including a group of municipalities that included Munich, Bavaria’s capital, and the city of Nuremberg, four people with knowledge of the matter said. Ude is a Social Democrat, while the Bavarian state government is ruled by a coalition of the Christian Social Union and the Free Democratic Party.
The Bavarian government may join the buyers through a state foundation, BayernLB spokesman Matthias Luecke said in an e-mail. That’s a matter between Patrizia and the foundation, and BayernLB’s board didn’t know of their arrangement when it chose the winning bid, he said.
The EU had required the bank to sell its stake in GBW by the end of this year after it received state aid in 2008. The European Commission, the EU’s executive arm, checks whether state aid distorts competition in the 27-nation bloc.