The deal will create Germany's largest bank, surpassing Deutsche Bank AG.
Commerzbank AG is close to buying Allianz SE’s Dresdner Bank for about ¤9 billion ($13.3 billion) in a deal that would create Germany’s largest bank by customers and branches, surpassing Deutsche Bank AG, two people with knowledge of the matter said.
Commerzbank Chief Executive Officer Martin Blessing and Allianz CEO Michael Diekmann have agreed in principle on a deal, said the people, who declined to be identified because the talks are private. Both supervisory boards are scheduled to meet tomorrow to discuss the transaction.
The biggest financial-services takeover in Europe this year would create a bank with about 12 million retail clients and 1,900 branches in Germany. For Munich-based Allianz, Europe’s largest insurer, the sale would unwind the ¤23.5 billion acquisition of Dresdner, which has dragged on its profit and stock since 2001.
“Commerzbank will stand toe-to-toe with Deutsche Bank in the German retail market,” said Manfred Jakob, a Frankfurt-based analyst at SEB AG, who recommends investors buy Commerzbank and Allianz shares. “Allianz will finally get the millstone off its neck.”
While an accord may be announced as soon as this weekend, the deal could still unravel over unresolved questions such as how much of any future losses at Dresdner’s securities unit Allianz is willing to shoulder, the people said. The so-called risk shield offered by Allianz may be about ¤1 billion, they said. Allianz, in a statement yesterday, said it’s in “advanced talks” about Dresdner that “may or may not lead to a deal.”
Two-Step Purchase: Spokespeople at Allianz, Commerzbank and Dresdner declined to comment on a possible agreement.
Commerzbank fell 37 cents, or 1.8 per cent, to ¤20.09 in Frankfurt trading yesterday, valuing the bank at ¤13.3 billion.
Allianz gained 60 cents, or 0.5 per cent, to 114.10 euros, giving the insurer a market value of 51.6 billion euros.
The German insurer has fallen about 61 per cent since the Dresdner acquisition was announced on April 1, 2001, more than the 49 per cent drop in the Bloomberg Europe 500 Insurance Index.
Commerzbank plans initially to buy 51 per cent of Dresdner and acquire the remainder next year, according to two people close to the matter. The bank might also swap its Cominvest asset management unit as partial payment for Dresdner and Allianz may keep a stake of less than 30 per cent in the combined bank, one of the people said.
Dresdner Kleinwort: Blessing, 45, took over in May from Klaus-Peter Mueller, who revived Commerzbank’s profit by retreating from investment banking and focusing on lending to mid-sized German companies.
Diekmann, 53, put Frankfurt-based Dresdner up for sale this year after sub-prime-related losses at the Dresdner Kleinwort securities unit eroded profit.
Allianz has also been in discussions with state-owned China Development Bank, which finances the nation’s public works projects.
