Allianz and Dresdner Bank unveil merger terms

German insurance giant Allianz and Dresdner Bank yesterday unveiled the terms of a multi-billion-dollar tie-up which would create a new European financial powerhouse and help transform Germany's banking and insurance sectors.

Allianz said in a statement that it would offer the equivalent of 53.13 euros per share for the shares it did not already own in Dresdner Bank, the country's third-biggest bank.

That represented a 15% premium to the Dresdner Bank share price last Wednesday, the day before the merger talks were confirmed, and meant that the total value of the deal was an estimated 23 billion euros.

Both the management and supervisory boards of Dresdner Bank 'recommend their shareholders to accept the offer,' Allianz said in a statement.

The offer was a complex combination of both cash and shares which, at the end of the day, meant that Dresdner Bank shareholders would receive one Allianz share and 200 euros in cash for every 10 shares held in Dresdner Bank.

Three Dresdner Bank executives would be appointed to the Allianz management board.

Allianz has some 17 million customers in Germany, while Dresdner Bank serves 6.5 million customers via its network of 1,200 high street branches. A combination of the two would create one of the biggest asset managers in the world, managing more than one trillion euros in assets, the partners claimed.

Allianz has long dreamed of creating a bancassurance group, a new type of financial company in Europe, combining both insurance and banking products.

That was why it wanted to team with Dresdner Bank because the bank's branch network would provide a ready-made distribution channel for Allianz's mutual funds and insurance products at a time when Germany's private pension market is exploding.