Santander considers making a move for Dresdner

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The Independent Online

Banco Santander, the Spanish group that owns Abbey, is considering a move to gatecrash the proposed merger between Commerzbank and Dresdner Bank, although insiders believe an all-German tie-up is already a "done deal".

Santander, which bought Abbey in 2004 and looked seriously at Alliance & Leicester last year, is believed to have approached Lazard to advise on a possible move. It is thought to be at a very preliminary stage of considering a deal.

Sources close to the German groups said a tie-up between Commerzbank and Dresdner, which is owned by giant insurer Allianz, was almost "a done deal" after several weeks of talks. Sources close to one of the banks speculated that Allianz could be encouraging Santander's participation to create a competitive auction. Reports in Germany have also noted that Deutsche Bank could be interested in a bid for Dresdner.

It is unknown whether the suitors have targeted all of Dresdner, which announced in March that it was to split its retail banking group from its investment bank Dresdner Kleinwort.

The government is believed to back Dresdner's merger with Commerzbank, although, according to the source, German unions fear a domestic merger could lead to more job cuts than Dresdner being bought by a foreign rival.

The market has expected consolidation in the sector since Deutsche Post announced it would listen to offers for its retail bank Postbank last year, which led to a round of speculation over potential domestic tie-ups.

Kiri Vijayarajah, analyst at Citigroup, said earlier this week that a merger between Commerzbank and Dresdner would be appealing as a "synergy-rich deal". The analyst warned that the merged group should avoid trying to buy Postbank if the deal goes ahead as it would be "expensive at current levels and less attractive".

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