Commerzbank to axe 9,000 jobs in Dresdner takeover

By John O'Donnell

FRANKFURT (Reuters) - Commerzbank outlined its plans to cut 9,000 jobs and shrink investment bank Dresdner Kleinwort to a rump after buying Dresdner Bank, but investors were unhappy about the $14.5 billion deal.

Allianz is selling the bank in two tranches to create a stronger German number two behind Deutsche Bank. It is a deal that will trigger one of the biggest rounds of job cuts in banking since the markets crisis began.

It is also an admission from Allianz -- after seven years and billions in losses -- that it does not need its own bank in order to sell insurance to bank customers.

In Germany, investors were skeptical that Commerzbank Chief Executive Martin Blessing could make the deal work.

Dieter Ewald, a fund manager with Frankfurt Trust, which owns shares in Commerzbank said: "I think this is a real heavy-lifting exercise for Commerzbank and they might not make it."

Dirk Becker, an analyst with Landsbanki Kepler said: "It is good for Allianz. In the seven years they have owned Dresdner they have learned that they don't have a clue about running a bank.

"But it is a huge integration. We will see in half a year that something will go wrong."

Commerzbank shares tumbled almost 12 percent, lopping more than $2 billion off its market value, after it said it would buy 60 percent of Dresdner now and the rest in 2009.

Meanwhile Finance Minister Peer Steinbrueck told reporters accompanying him on a trip to Beijing that "the government definitely did not exert any influence" in the sale of Dresdner Bank to Commerzbank, though it had been involved in the talks in an unspecified role.

The new group faces several challenges. For one, Commerzbank needs shareholders to pitch in the money to buy the remaining stake in Dresdner.

Should they say no, as they have to similar requests in the past, Blessing said it would take longer to wrap up a deal and reach the promised cost savings of almost 2 billion euros.

Much of the 9.8 billion euro purchase price will be paid to Allianz in the form of shares, leaving Europe's biggest insurer with a stake of almost 30 percent in the new Commerzbank.

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On Monday, the new owner outlined a blueprint to cut costs by slashing the combined group's 67,000 staff.

More than half the savings will come from Dresdner Kleinwort, the struggling investment bank which has been further hobbled by the credit crunch.