German insurer Allianz SE sells Commerzbank to Dresdner Bank

The transaction will occur in two steps and is expected to be completed by the end of 2009 at the latest, subject to regulatory and antitrust approvals. First, Commerzbank will acquire 60.2 percent of its shares from Allianz and, in exchange Allianz will receive 163.5 million shares, or about 18.4 percent of Commerzbank, worth approximately EUR 3.4 million (USD 5 billion). Commerzbank will also pay Allianz another EUR 2.5 billion in cash (USD 3.7 billion). In the second step, Dresdner Bank will merge with Commerzbank, which will acquire its remaining 39.8 percent shares. Allianz will receive EUR 3.2 billion (USD 4.7 billion) in shares from Commerzbank, approximately 30 percent of Commerzbank’s shares.The new Commerzbank will focus on Private and Business customers, Mittelstandsbank, Central and Eastern Europe, Corporates & Markets (including Public Finance) and Commercial Real Estate. The deal results in a loss of 9,000 workers out of the combined banks’ ranks of 67,000 workers. Of the total job cuts, 6,500 will take place in Germany, as back offices and technology systems belonging to the two banks are integrated. Of the 2500 job cuts outside of Germany, some 1000 are expected to go in London, mainly at investment bank arm Dresdner Kleinwort. Commerzbank reveals that the new bank will have 11 million private customers, 100,000 corporate and institutional customers and a network of 1200 branches in Germany.