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Allianz AG Holding at Center of Failed Dresdner Bank Merger Talks

Strategic Insights

— 1 min read

Germany's corporate realignment is expected to undergo significant changes with the easing of corporate capital gains taxes, and German insurer Allianz AG Holding has found itself at the center of another failed bank merger following the collapse of talks between Dresdner Bank and Commerzbank. The failed merger marks the second attempt for Dresdner this year, and the second time Allianz has lost the chance to trim its holdings in the bank. Allianz, which owns nearly 22% of Dresdner, took the side of its longtime partner Dresdner as the banks struggled to reach agreement on the pricing of the transaction, reportedly worth $40 billion.

Key Takeaways:

  • The collapse of talks between Dresdner Bank and Commerzbank marks the second failed merger for Dresdner this year, and the second time Allianz has lost the chance to trim its holdings in the bank.
  • Allianz, which owns nearly 22% of Dresdner, took the side of its longtime partner Dresdner, reportedly valuing the banks equally, with Dresdner adamant about making the valuation closer to 60/40 in its favor.
  • Allianz Chairman Henning Schulte-Noelle publicly signaled support for Dresdner's position, and has strongly advocated consolidation of Europe's banking industry, while not offering Allianz as a matchmaker.
  • Allianz was happier with another recently announced merger, that of Germany's HypoVereinsbank and Bank Austria AG, in which Allianz owns a 17.4% stake, and will finance the transaction with an issue of 114 million HypoVereinsbank shares.
  • The enlarged bank, with assets of about 650 billion euros, will reach far into Central and Eastern Europe, trimming Allianz's stake slightly to about 14%.

Statistics:

  • The failed merger between Dresdner Bank and Commerzbank was reportedly worth $40 billion.
  • Allianz owns nearly 22% of Dresdner Bank.
  • The enlarged bank, combining HypoVereinsbank and Bank Austria AG, will have assets of about 650 billion euros.
  • The transaction will be financed with an issue of 114 million HypoVereinsbank shares.
  • Allianz will lose a 2.6% stake, with its ownership in the enlarged bank trimmed to about 14%.

Sources:

  • COMTEX (http://www.comtexnews.com)
  • A. M. Best Company, Inc.

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