Landesbank Baden-Württemberg on Thursday said it would go ahead with its takeover of Sachsen LB, its smaller German peer, but only after the state of Saxony and the public bank sector offered fresh guarantees to cover losses from Sachsen LB’s failed credit investments.

LBBW said it would pay €328m ($481m) in cash for Sachsen LB, near the bottom of the €300m-€900m range LBBW said it would pay when it first agreed to buy Sachsen LB in August.