Germany's Karstadt department stores were thrown a lifeline on Monday evening. US investor Berggruen is set to take over the company and keep all of its employees on the payroll.
The deal should mean that 25,000 jobs are safe
US investor Nicolas Berggruen is set to take over Germany's insolvent Karstadt chain of department stores.
The decision came on Monday evening after eight hours of talks between the bankruptcy administrators and various investors competing for deal.
Berggruen said he wanted to "get Karstadt back on track." His proposal for taking over the chain of department stores was the only bid that did not include any further job cuts.
Other bidders were German-Swedish investor Triton and real estate company Highstreet. The latter, which is partly owned by investment bank Goldman Sachs, owns the majority of the buildings used by Karstadt.
Karstadt's current owner, Arcandor, filed for bankruptcy in 2009.
A sustainable concept
Berggruen said he was optimistic about Karstadt's future
The deal with Berggruen is to be signed by the middle of the week and the transaction is expected to be finalized by the end of the summer.
Bankruptcy administrator Klaus Hubert Goerg said he was confident the agreement with Berggruen was a step towards saving Karstadt as a company.
Berggruen expressed confidence that he would be able to lead the 130-year-old department store chain back to profitability.
"We are very grateful for the trust that has been placed in us and we are convinced that this was the right decision as our concept for the company had the best corporate strategy and the best chances for sustainable success," he said.
The services sector trade union Ver.di, representing the interests of the employees, had already expressed its preference for Berggruen bid, ahead of Monday's decision.
Spokeswoman Cornelia Hass welcomed the deal as a very "sensible" decision with "good perspectives" for Karstadt.
Karstadt employs around 25,000 people at its more than 120 stores across Germany.
Nicolas Berggruen is founder and president of Berggruen Holdings, an international investment firm. He is the son of the famous art collector Heinz Berggruen, who was born in Germany and emigrated to the United States, later returning to fight with the US Army in World War II.
Author: Andreas Illmer (dpa/AP)
Editor: Chuck Penfold