In an effort to develop its asset servicing business in Germany, Bank of New York Mellon Corp. [BK] announced Monday that it has agreed to buy BHF Asset Servicing GmbH from BHF-Bank Aktiengesellschaft for $343 million.

The deal, which is expected to close in the third quarter, would make BNY Mellon the second largest asset servicing provider in Germany with $642 billion in assets under custody and administration and a depot banking volume of $163 billion. In addition, the acquisition would expand BNY Mellon’s existing capabilities to include German domestic custody services and KAG fund administration.

“This transaction expands our capabilities and market share in one of the world’s largest fund markets, positioning BNY Mellon at the forefront among securities servicing providers in Germany and creating a strong platform for growth across our businesses,” Tim Kearney, the chairman of Europe at BNY Mellon and co-CEO of BNY Mellon Asset Servicing, said in a press release.

The transaction will include the purchase of BHF Asset Servicing’s wholly-owned fund administration affiliate, Frankfurter Service Kapitalanlage-Gesellschaft mbH. Both will become part of BNY Mellon’s Asset Servicing business.

The new BNY Mellon Asset Servicing business in Germany, which will be based in Frankfurt, will offer a range of products and services for investment companies, financial institutions and institutional investors.  The German business will be run by Michelle Grundmann from BNY Mellon and Juergen P. Frank and Christopher V. Friedrich from BHF Asset Servicing.

BNY Mellon has been serving clients in Germany since 1931. The company opened its first office in Frankfurt in 1972 and when this acquisition is completed it would have 560 employees in Germany. In addition to asset servicing, depotbanking and asset management, BNY Mellon provides corporate trust, treasury services, depository receipts and client management in Germany. It has over 100 institutional relationships in Germany and offers regional coverage for 14 countries Central, Eastern South Eastern Europe.