Allianz and Commerzbank poised for Dresdner deal
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Sun, 31 Aug 2008 15:38:52 GMT |
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By John O'DonnellFRANKFURT (Reuters) - Management at Allianz SE and Commerzbank AG 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 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 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.In June last year, Reuters reported that Allianz had begun to consider its options for Dresdner. The resulting jump in the insurer's share price reflected the degree of investor frustration with the botched takeover.But finding a buyer has not been easy, mostly because of Dresdner's accident-prone investment bank -- a business, said one insider, which Allianz had never intended to keep."It was clear from the start to Allianz that they did not want to keep the investment bank," this person said. "But when the time was right to sell it -- at the top of the investment banking boom in late 2006 -- they fell asleep at the wheel."The sale will beef up Commerzbank. Despite being one of the country's biggest lenders, it is still a lightweight by European standards, with a market value of about 13 billion euros -- less than half that of Frankfurt neighbor Deutsche Bank.(Editing by David Holmes)
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