Commerzbank confirms €9bn takeover of rival Dresdner

Commerzbank has secured the takeover of Dresdner Bank in a deal worth almost €9bn, to create a group that will overtake Deutsche Bank as the largest retail banking operation in Germany.

News of the deal emerged last night after a meeting of the supervisory boards of Commerzbank and Allianz, the giant insurance group that owns Dresdner.

Commerzbank's chairman, Martin Blessing, said: "We are taking advantage of a unique opportunity to make Commerzbank the leading bank for private and corporate customers in Germany." He added it would have "European significance".

Of the €8.8bn price, €1.6bn will be in cash and the balance in shares. Commerzbank has also agreed to sell parts of its asset management business to Allianz for €700m, and has put a €975m payment in trust relating to certain asset-backed securities for Dresdner.

The deal, which will be carried out in two stages, is expected to complete at the end of next year, with the bank predicting €5bn in synergies by 2012.

Allianz will receive a 30 per cent stake in the merged group, and Commerzbank will now only market Allianz insurance products.

Michael Diekmann, chief executive of Allianz, said: "This transaction is a milestone for banking consolidation in Germany and strengthens the German economy."

The takeover had the backing of the German government, and despite strong interest from the China Development Bank, an all-German tie-up was seen as a "done deal" as early as June. The successful capture will come as a relief to Commerzbank after it failed in an attempt to land its rival eight years ago.

The group announced that, as the unions feared, it would slash 9,000 of the combined groups' 67,000 employees.

The merged group will have more than 11 million customers in Germany, and some 1,540 branches.

Much of the interest around the sale had been whether Commerzbank would keep Dresdner Kleinwort, the group's investment banking business. It is understood that the division will be cut back, with desks including proprietary trading and structured products shut, releasing €1.4bn in equity capital. About 2,000 jobs are expected to go, about half of them in London.