Allianz Emerges as a Global Power Player in $32.55 Billion Deal

Europe's largest insurer, Munich-based Allianz AG, is poised to take on a significant role in the global asset management scene, following the merger of Deutsche Bank and Dresdner Bank AG. As part of the $32.55 billion deal, Allianz will acquire several lucrative fund-management operations, propelling it into the top five asset managers worldwide. Behind its unassuming image, Allianz has a reputation for being a key player in Europe's biggest economy, often steering events through its network of corporate cross-shareholdings.

Key Takeaways:

• Allianz will acquire DWS Investment GmbH, Germany's largest mutual fund operation, with a market share of about 25%, and operations in Switzerland, Austria, and Luxembourg.
• The acquisition of DWS Investment GmbH, along with other fund-management operations, will push Allianz's assets under management to nearly $1 trillion, nearly doubling its current volume.
• Allianz will also gain a one-third stake in Deutsche Bank's retail banking operations, which will be floated as a separate company on the stock exchange within three years, providing a powerful distribution channel for its services.
• The acquisition of Deutsche Herold's insurance operations will further expand Allianz's presence in the market.
• Deutsche Bank, after shedding its retail banking operations, will focus on serving big companies, institutions, capital markets, and high net worth individuals, with a significant move into electronic banking.
• Chancellor Gerhard Schroeder appeared reluctant to intervene in the deal, citing the deal's potential benefits to the German economy.
• The deal has sparked speculation about further changes in the industry, with HSBC Holdings PLC reportedly considering a hostile takeover of Commerzbank AG.

Statistics:

• Deutsche Bank's takeover of Dresdner Bank AG is worth €30 billion.
• $32.55 billion: the market value of the combined bank.
• €80 billion: the market value of the combined bank.
• $403 billion: the current volume of funds under management by Allianz.
• 25%: DWS Investment GmbH's market share of the German mutual fund market.
• One-third: Allianz's stake in Deutsche Bank's retail banking operations.

Sources:

• "Deutsche Bank to Take Over Dresdner Bank" (Frankfurter Allgemeine Zeitung, 12 February 2009)
• "Allianz Takes Major Stake in Deutsche Bank's Assets" (Wall Street Journal, 12 February 2009)
• "Germany's Big Financial Groups Need Work" (Financial Times, 12 February 2009)