(July 26) – “Merger talks between Germany’s Dresdner Bank AG and Commerzbank AG have failed, Commerzbank said Wednesday,” according to today’s WSJ.com.
” ‘In view of the complexity of the topic, it seems impossible to produce a plan that reflects the interests of all parties,” Commerzbank said in a statement. The bank added the strategic objectives of the two banks weren’t far apart, but “a critical assessment of the pros and cons of a merger ultimately failed to yield a convincing perspective.’ “
“Commerzbank Chairman Martin Kohlhaussen said at a news conference that the ‘real value added of a merger can’t be achieved.’ The bank said both Dresdner and Commerzbank are now free to consider other options.”
” ‘Commerzbank will primarily concentrate on strengthening its European links and will implement organizational measures’ to expand in Internet operations, as well as expanding as an investment bank, it said.”
“A meeting Tuesday among the three parties ended without agreement on the most difficult issue, the valuation of a deal, according to people familiar with the matter. Allianz, which owns 22% of Dresdner, supported Dresdner’s view that Dresdner shareholders should get close to 60% of the combined bank, these people said.”
“The two Frankfurt banks, Germany’s third and fourth largest, had been exploring a merger that would have created a combined company valued at more than 40 billion euros ($37.53 billion), with the necessary scale and profitability — they hoped — to play a lead role in European banking consolidation.”
“But their talks ran into several problems, including the question of how to determine fair value for a stock swap, how to combine operations with Allianz in asset management and insurance, and what to offer Commerzbank’s existing insurance partner, Assicurazioni Generali SpA of Italy, which is a rival to Allianz.”