Commerzbank to decide on Dresdner takeover

August 25, 2008
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, FRANKFURT, August 25 – Germany\’s second biggest bank, Commerzbank, will this week decide whether to take over the subprime crisis-hit Dresdner Bank, the Financial Times Deutschland newspaper said on Monday.

Commerzbank will hold an exceptional meeting of its supervisory board at the end of the week and make its decision following months of tough talks with Dresdner and its parent company, the insurance group Allianz, the daily said.

An unofficial source said later however that it was not sure a meeting would take place.

A Commerzbank spokesman contacted by AFP declined to comment on the report.

Several questions remained to be settled, including how much Dresdner Bank was worth and the level of risk each side was ready to assume, the newspaper said.

Dresdner Bank is due to split into two at the end of the month, with one focusing on retail and business banking and the other on investment banking after suffering heavy losses from the collapse of the US market for high-risk, or subprime, home loans.

According to weekend press reports, both sides have agreed that Commerzbank would take over Dresdner in the event a deal is reached, rather than an earlier suggestion of a merger of equals.

The Sunday edition of Die Welt said Allianz planned to retain slightly less than 30 percent of a new bank.

According to the Sueddeutsche Zeitung, which quoted sources close to the talks on Monday, "it is possible an agreement will be reached in the next two weeks."

The newspaper said the banks were locked in intensive talks and that several meetings were planned in the coming days.

It added that Dresdner Bank\’s sale price was currently in a range of nine to 10 billion euros (13.2-14.7 billion dollars).

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