Cerberus buys Austrian lender

The New York-based private investment giant has further expanded its European presence with the acquisition of BAWAG bank.

New York-based Cerberus Capital Management has acquired BAWAG PSK, a bank in Austria, from the Austrian Trade Union Association, BAWAG said in a statement.

Cerberus’ Austrian partners, including Generali, Wüstenrot and a private group comprised of individuals, also took part in the transaction, according to the statement.

Bloomberg reported the value of the transaction at €2.6 billion ($3.4 billion).

“What is most important to Generali is to strengthen and expand the bank with its large number of customers, its excellent staff, attractive products and extensive distribution network,” the statement said. ”BAWAG PSK will become a strong player on the Austrian financial market again, and Generali and other members of the bidder group will make a substantial contribution toward this objective.”

BAWAG is in the process of paying Thomas H. Lee, a Boston-based private equity firm approximately $100 million in a settlement related to the collapse of the broker Refco. Under the terms of the agreement, BAWAG will pay TH Lee at least $84 million over the next two year as part of a settlement with the US Department of Justice. US prosecutors and Refco investors blamed BAWAG for helping disgraced Refco CEO Philip Bennet and others pull off a balance-sheet fraud that resulted in Refco’s collapse. TH Lee’s fifth fund, Thomas H. Lee Equity Fund V, lost the $245 million it had invested in Refco before the company’s initial public offering last year.

Cerberus European Capital Advisors, the firm’s European arm, hired Kenneth Leet to become its president earlier this month. He will work closely with John Snow, the 73rd US Secretary of the Treasury who served under President George W. Bush. Snow became the chairman of Cerberus last month.