Allianz sells Dresdner Bank to Commerzbank
by Gill Montia
Story link: Allianz sells Dresdner Bank to Commerzbank
Allianz has sold its Dresdner Bank subsidiary to Commerzbank, Germany’s second-largest bank.
The cash and shares transaction values Dresdner at €9.8 billion, Allianz having paid €24 billion for the business in 2001.
Allianz bought the bank because it planned to cross-sell its insurance products to Dresdner’s customers and take advantage of growth in the European pensions sector.
However, the opportunities for expansion using Dresdner’s customer base never matched expectations and in March of this year, Allianz announced that it was restructuring Dresdner with a view to a sale.
Meanwhile, sub-prime losses at the banks investment division, Dresdner Kleinwort, have continued to mount, causing the bank to report a loss of €715 million in the three months to the end of June, following on from a loss of €575 million in the first quarter of the year.
Under the terms of the acquisition, a trust of almost €1 billion will be created to cover any further writedowns by Dresdner Kleinwort.
The transaction will take place in two phases and should be completed by the end of 2009.
It will leave Allianz with a 30% holding in Commerzbank and involves Allianz buying Cominvest, Commerzbank’s fund management business, for around €700 million.
The integration of Dresdner and Commerzbank could create up to 9,000 job losses, with analysts predicting that 1,000 London-based jobs are at risk.