Financial risks

On 14 January 2009, Deutsche Post AG and Deutsche Bank AG agreed to restructure the transaction to sell the shares in Deutsche Postbank AG held by Deutsche Post AG. The contract now comprises three tranches.

The first tranche provided for the sale of 50 million Postbank shares via contribution as a non-cash capital increase in return for 50 million new shares in Deutsche Bank AG and via the rendering of payments and non-cash benefits on the part of Deutsche Bank AG in connection with hedging transactions. Thereby any claim to payment of a purchase price for the shares was waived. The first tranche was carried out in the period from April to July 2009. Mechanisms designed to avoid possible market disturbances were applied to the sale of the Deutsche Bank shares.

As at 31 December 2009, Deutsche Post AG was still in possession of 86,417,432 Postbank shares. It will sell an additional 60 million Postbank shares in exchange for a mandatory exchangeable bond with a cash value at the time of closing of €2,568 million and a 4% accrued interest per year that will mature in three years (second tranche). The bond was underwritten by Deutsche Bank AG and will be exchanged for 60 million Postbank shares on 25 February 2012.

For the third tranche, Deutsche Post AG and Deutsche Bank AG have agreed on put and call options, which are in place for transferring the remaining 26,417,432 Postbank shares. The exercise periods are set between the third and fourth year after the closing on 25 February 2009. The derivatives agreed for the second and third tranches could lead to considerable volatility on the balance sheet. This risk is explained in greater detail in the Notes, where you will also find information on other balance sheet and financial risks.