FRANKFURT Agreement on a merger between
Germany's Commerzbank (CBKG.DE) and Dresdner Bank could
possibly be reached by the end of this month, according to a
source familiar with the situation at the bank.
Commerzbank was making arrangements for the possibility of
a merger, the person told Reuters on Saturday.
German weekly Welt am Sonntag reported in a preview of a
report due to be published on Sunday that an agreement between
Commerzbank and insurer Allianz (ALVG.DE) about buying its
Dresdner Bank was possible within the coming week.
The paper quoted financial sources as saying that the two
companies had agreed on the basic principles of the
According to the report, Commerzbank would buy Dresdner for
slightly more than 9 billion euros ($13.38 billion) and Allianz
would vouch for writedowns on the balance sheet of Dresdner of
up to 1 billion euros. The sums were still being negotiated.
Allianz would have a stake of slightly less than 30 percent
in the merged bank, the report also said.
Commerzbank has been in talks with insurer Allianz about
buying its Dresdner Bank since June but there have been few
public signs of life in the negotiations in recent weeks.
On Friday, however, a source with direct knowledge of the
matter told Reuters Commerzbank planned to call a supervisory
board meeting late next week to discuss a merger with Dresdner
The 21-strong supervisory board is Commerzbank's governing
body and its approval is required for large deals such as a
merger with Dresdner.
Shareholders hope a sale will end an unhappy marriage.
Parent Allianz was once seen as an unshakeable financial
powerhouse but is now licking its wounds largely thanks to
The architects of the Dresdner takeover in 2001 had hoped
to sell bank accounts to Allianz customers as well as other
products such as car insurance over the counter at bank
Instead, Dresdner racked up losses of almost 3 billion
euros ($4.5 billion) after the merger as cross-selling
The sale of Dresdner Bank had been thrown into doubt after
its earnings collapsed and writedowns from the markets crisis
Despite being Germany's second-biggest lender, Commerzbank
is still a lightweight on the international stage with a market
value of about 13 billion euros -- less than half that of
Frankfurt neighbour Deutsche Bank (DBKGn.DE).
Buying Dresdner, Germany's third-biggest bank, would give
Commerzbank a leg up in Europe's biggest economy although it
would still lag Deutsche.
Dresdner's retail business, which analysts estimate is
alone worth 8 billion euros, is likely to be sold as a packet
with its struggling investment bank.
(Reporting by Patricia Uhlig and Alexander Huebner, editing
by Mike Peacock)