UPDATE 2-SocGen to bulk up in Germany with Commerzbank deal

* Division had 2017 revenues of 381 mln euros

* Deal comes in as Commerzbank undergoes restructuring

* SocGen says deal will boost its Lyxor arm

* Lyxor to add 13 bln to its 140 bln euros in managed assets (Adds detail, background)

PARIS, July 3 (Reuters) - French bank Societe Generale will buy Commerzbank's derivatives and asset management businesses, strengthening its presence in those areas and boosting its standing in Germany.

The two banks did not disclose a price for the deal. Commerzbank, which is in the process of selling non-core assets, said the division had 2017 gross revenues of 381 million euros ($443 million).

SocGen said the purchase would boost its asset-management unit Lyxor, which has a strong presence in the field of exchange traded funds, and raise its general profile in Germany, the euro zone's biggest economy.

Lyxor will add 13 billion euros worth of assets under management to its current 140 billion euros.

The operations involved have 500 staff in locations such as Hong Kong, Switzerland, Luxembourg, Paris and London, as well as in Commerzbank's home market.

SocGen's investment bank has been under pressure following the departure of previous head Didier Valet in March over a financial settlement of an investigation into alleged Libor rates-rigging case.

The bank has been losing ground on key markets such as France's merger and acquisition advisory, where it now ranks 15th, lagging behind its main French and foreign competitors.

It has also had some relatively tepid performances in equity derivatives - an area where it has been traditionally strong.

"This acquisition would be transformational for our activities in Germany as it would enable Societe Generale to reach a new scale in the leading eurozone economy," said Séverin Cabannes, SocGen's deputy chief executive officer.

BENEFITS FOR BOTH SIDES

The French bank had already identified Germany, where it does not have a retail presence but employs 3,500 people in areas such as corporate financing, investment banking and consumer lending, as one of the markets it wants to develop.

The deal gives SocGen access to some retail investors through the asset management business.

Still partly owned by the German government, Commerzbank is in a restructuring mode as parts of its business have struggled amid weak markets and slow loan demand.

The sale is in line with its "4.0 strategy," which entails divesting non-core assets to raise capital for the company's core banking franchise, said Chief Executive Martin Zielke.

"We are simplifying our business, we are contributing to our cost-cutting targets, and we are freeing up capital for the benefit of our core business with private and corporate clients," he added.

The lender is cutting jobs while focusing on digitalising its back office and expanding its retail customer base. It has ambitious customer targets, for which it will need more capital. Commerzbank, which is also seeking a buyer for its distressed shipping loans, said the deal with SocGen will allow it to cut costs by 200 million euros by 2020.

The transaction is not transformational for either bank but is "still marginally positive," UBS's banking analyst Huw Williams said in a note.

Commerzbank will cut costs and SocGen will consolidate market share in its core businesses "at a reasonable price," he said.

SocGen's shares were up 1.2 percent by 1050 GMT while shares of Commerzbank rose 1.5 percent.

The transaction excludes Commerzbank's cash equity brokerage and commodities hedging business, but will include areas such as Commerzbank's structured trading and investment products as well as the German bank's Comstage ETF brand.

SocGen said it expected the deal to get regulatory clearance in the second half of 2018, and added it would have a positive impact on its return on tangible equity. ($1 = 0.8597 euros) (Additional reporting by Jean-Michel Belot in Paris and Maria Sheahan in Frankfurt Editing by Keith Weir)