Allianz and Commerzbank poised for Dresdner deal
August 31st, 2008 | by admin |By John O’Donnell
FRANKFURT (Reuters) - Management at Allianz SE (ALVG.DE: Quote, Profile, Research, Stock Buzz) and Commerzbank AG (CBKG.DE: Quote, Profile, Research, Stock Buzz) sought approval from their supervisory boards on Sunday to sell control of the insurer’s Dresdner Bank to Commerzbank.
Taking over Dresdner, which analysts estimate to be worth about 9 billion euros ($13 billion), would create a group to rival flagship lender Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research, Stock Buzz) and break the rigid banking mould in Germany, Europe’s biggest economy.
It would give Commerzbank a badly needed leg-up in its home market, which is dominated by state not-for-profit lenders, and allow Allianz to end an unhappy marriage that unsuccessfully tried to match investment bankers with insurance salesmen.
But it is also likely to cost about 9,000 jobs, say sources familiar with the matter, and casts a pall of uncertainty over the future of Dresdner Kleinwort, the group’s investment bank.
Commerzbank Chairman Klaus-Peter Mueller previously closed his company’s investment bank after heavy losses.
China Development Bank CHDB.UL had also been interested in Dresdner but was sidelined in the face of opposition in both countries’ capitals to a deal.
Architects of the 24 billion euro Dresdner takeover seven years ago had hoped to sell bank accounts to Allianz customers as well as products such as car insurance at bank branches.
Instead, Dresdner racked up losses of more than 3 billion euros, most recently thanks to heavy writedowns on dud debt investments.
