FRANKFURT (Reuters) -- Deutsche Bank has sold its remaining stake in Daimler AG in one of the final steps toward unwinding 'Germany Inc,' a once powerful system of cross-shareholdings in Europe's largest economy.
The bank made a gain of 110 million euros ($163.2 million) from divesting the Daimler shares in the third quarter, it said Oct. 27 with the release of earnings.
Just 13 years ago, 60 of Germany's 100 biggest companies belonged to the shareholding network, set up as a tool to protect German companies from foreign takeover and provide support in the event of large-scale bankruptcies.
Deutsche Bank, Germany's largest bank, had been at its center along with insurer Allianz.
The bank, which has gradually reduced its Daimler stake over the past couple of years, had already sold its holdings in Allianz and industrial gases producer Linde.
As banks helped big industrial companies going public, they often ended up with some of the shares in their own portfolio, translating into board seats and guaranteeing the status of "most favored bank" -- otherwise referred to as the "Hausbank."
Through board seats on these companies, Deutsche Bank could force changes in corporate Germany while also looking after the country's interests, providing loans to large German corporations under favorable conditions if they helped Germany gain a competitive advantage in a particular industry.
Bank fired Daimler CEO
In one infamous incident in 1987, Deutsche Bank Chief Alfred Herrhausen fired Daimler Benz CEO Werner Breitschwerdt and installed Edzard Reuter in his place.
The so-called "Germany Inc.' began to break down in the late 1990s when Deutsche decided to focus on its core banking business and began to unwind the stakes. The selloff was also fueled by the introduction of the euro and new tax rules that allowed German firms to divest assets at favorable conditions.