Germany’s Commerzbank settles 9.8bn euros ($14.4bn; £8bn) worth deal with insurer Allianz to buy Dresdner Bank.
In UK, Dresdner has considerable operations and this move will cause 9,000 job losses in which around 1000 positions to be cut in the UK.
Recently, Dresdner had suffered a lot of loses because of the sub-prime crisis and to cover further loses Commerzbank and Allianz are contributing 1.25bn euros.
The deal seems to create a real rival for Germany’s Deutsche Bank, which is country’s largest bank.
In terms of the customer numbers, the new combined group would be the biggest bank in Germany, but in terms of assets it would be at a considerable distance to Deutsche bank.
Almost 30% stake of Dresdner will be kept by Allianz and the procedure will consist of two-step transactions that involve of cash as well as stock. The deal will be finalized by the end of 2009.
According to Germany’s finance minister Peer Steinbrueck , the purchase of Dresdner by Commerzbank would benefit the country.
“It’s good for the country not only as a business location but also as a financial centre,” said Torsten Albig, Steinbrueck.’s spokesman.
The deal would help Commerzbank to expand in Germany as well as in abroad.
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