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Commerzbank agrees to buy Dresdner in $14.4-billion deal

September 01, 2008|From the Associated Press

FRANKFURT, GERMANY — Insurer Allianz agreed Sunday to sell Dresdner Bank to Commerzbank in a $14.4-billion deal, a sale that may herald a wave of German bank consolidation and keep foreign rivals from laying claim to a lucrative market.

The deal will create Germany's biggest bank in terms of customers, propelling it ahead of Deutsche Bank. However, the combined bank's assets will still fall shy of Frankfurt-based Deutsche Bank's total of approximately $2.93 trillion.

But the decision comes with a heavy toll in terms of job cuts: 9,000 workers out of the combined banks' ranks of 67,000 will be eliminated. But Allianz and Commerzbank executives say the deal makes sense financially and in terms of expanding market share in Germany and abroad.

"We are taking advantage of a unique opportunity to make Commerzbank the leading bank for private and corporate customers in Germany," Commerzbank Chief Executive Martin Blessing said.

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