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Allianz in talks to sell Dresdner Bank
2008-08-30
FRANKFURT (AFP) - German insurance giant Allianz is in "advanced talks" on the future of its Dresdner Bank unit, "that may or may not lead to a deal," it said Friday in a brief statement to financial markets. According to press reports, Allianz is mulling a sale to either Commerzbank, the second biggest German bank, or to state-owned China Development Bank (CDB). Two German dailies, the Frankfurter Allgemeine Zeitung (FAZ) and Handelsblatt, said Commerzbank boss Martin Blessing and Allianz counterpart Michael Diekmann had agreed on the basic terms of a sale late Thursday. But the head of Commerzbank's supervisory board, Klaus-Peter Mueller, told Hessicher Rundfunk radio on Friday: "There is no result yet." Commerzbank, the second biggest private German bank, is now better placed than the China Development Bank (CDB), the FAZ said, even though the Chinese bank was prepared to pay more for Dresdner, which is number three in Germany. German daily Die Welt also reported in its edition to appear Saturday that Allianz preferred a deal with Commerzbank. Citing sources close to Commerzbank, the paper reported that "the issue is nearly settled" and the sale should be announced soon after Commerzbank's supervisory board meets on Sunday. Allianz, however, has not yet formally rejected the CDB offer, Die Welt reported. Dresdner Bank is believed to be worth around nine billion euros (13.23 billion dollars) and Mueller told HR radio: "The Commerzbank board would not hold negotiations that it did not think it could finance." A deal with CDB would retain more jobs but would also likely face some political opposition, analysts say. Unions have said a Commerzbank-Dresdner Bank combination would lead to the loss of 9,000-12,000 posts. According to Friday's press reports, which cited sources close to the talks, Commerzbank would buy Dresdner in two stages, taking a 51 percent stake first in exchange for 30 percent of its own shares. Allianz paid 24 billion euros for Dresdner Bank in 2001 but was never able to transform a deal that was supposed to provide a new network for insurance policy sales. Commerzbank's board was to meet on Friday, the FAZ said, while on Sunday, the supervisory boards of Allianz, Commerzbank and Dresdner Bank were expected to make their final decisions. A long-awaited deal would mark a significant consolidation of Germany's private banking sector while public savings banks would continue to dominate the retail banking sector. A combined bank would have total assets of around 1.09 trillion euros (1.6 trillion dollars) but would still trail far behind number one Deutsche Bank, with 1.99 trillion euros.
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