Commerzbank has agreed to buy Dresdner Bank from Allianz in a E9.8 billion deal. According to media reports, this deal will result in the elimination of 9,000 workers out of the combined banks' 67,000 employees.

The transaction will take place in two steps and should be completed no later than the end of 2009. It is subject to approval by the regulatory authorities.

In the first step, Commerzbank will acquire 60.2% of the shares in Dresdner Bank from Allianz. In exchange Allianz will receive 163.5 million new shares in Commerzbank generated from a capital increase against contribution in kind, which is equivalent to a share of 18.4% of the increased share capital of Commerzbank.

In the second step, Dresdner Bank will be merged with Commerzbank whereas Allianz will receive shares in Commerzbank worth E3.2 billion. The final stake in Commerzbank, which Allianz will hold after the second step, will depend on the exact exchange ratio of Commerzbank shares to Dresdner Bank shares. Allianz’ target stake in Commerzbank will amount to nearly 30%. This will make Allianz the majority shareholder by far and a strong partner of the new bank.

According to the companies, the new bank will offer Allianz’ insurance products through an exclusive sales agreement. The co-operation hitherto of Commerzbank and Generali in the insurance field will not be continued after expiry. Moreover, Allianz global investors will be the preferred partner of the new bank in the asset management business. With the acquisition of Cominvest, Commerzbank’s asset management entity, Allianz strengthens its market position in this segment.

Michael Diekmann, CEO of Allianz, said: This is a milestone in the consolidation of the German banking sector. With this step we selected the best solution for Dresdner Bank. Together, the two banks will be the German market leader for retail clients and medium-size companies. The move will also secure the further success of its bancassurance strategy.

Out of the 9,000 jobs that will be cut, 6,500 will be cut in Germany and the rest will take place abroad, said media reports.