Wells Fargo & Company concluded an agreement for it to obtain a commercial real estate portfolio from Hypothekenbank Frankfurt, a subsidiary of Commerzbank. Hypothekenbank Frankfurt has been leading commercial real estate business operating out from London in past 20 years. The acquisition package will include the Hypothekenbank's assets worth almost GBP4.0 billion (US$6.05 billion) in the United Kingdom, especially those that are clustered in London.

A private equity firm, Lone Star Funds, will buy a fraction of this portfolio. This portion will comprise of Hypothekenbank's nonperforming assets worth GBP1.3 billion (US$1.96 billion).

The buyout is expected to be concluded by the third-quarter of this year. Upon finalization, Hypothekenbank Frankfurt's Max Sinclair will be hired as head of the London commercial property office. Wells Fargo & Company plans to take in some personnel from the acquired company in their effort to improve the integration process.  

The acquisition should help Wells Fargo widen its commercial real estate business in the U.K. Analysts have said that this would drive the bank's long-term profitability. Wells Fargo plans to use the U.K. subsidiary's competence to improve its current commercial real estate services.