French multinational banking and financial services company Societe Generale has agreed to buy Germany’s Commerzbank’s equity markets and commodities (EMC) business, making its position stronger in derivatives, while the German bank seeks to sell its non-core assets

A report in Reuters stated that the two banks did not disclose a price for the transaction, although Commerzbank said on Tuesday that its EMC division had 2017 gross revenues of around US$442mn.

“Societe Generale and Commerzbank’s EMC franchises are complementary and present an important potential of synergies. This acquisition would further reinforce our Global Banking and Investor Solutions activities in line with our 2016-2020 strategic plan” Séverin Cabannes, SocGen’s deputy chief executive officer, said.

“In addition, while complementing Lyxor’s ETF franchise, this acquisition would be transformational for our activities in Germany as it would enable Societe Generale to reach a new scale in the leading Eurozone economy,” Cabannes added.

Commerzbank Chief Executive Martin Zielke said the sale of the unit was in line with the German bank’s “4.0 strategy”, which entails divesting non-core assets to raise capital for the company’s core banking franchise. The company said the reduction of expenses associated to EMC business is estimated to reduce the bank’s cost base by at least US$232mn by year-end 2020 and to contribute to the cost reduction target announced.