Commerzbank secures Dresdner Bank deal
Commerzbank, Germany's second biggest bank, has wrapped up its purchase of peer Dresdner Bank, nailing down a risky deal that has taken months to finalise.
"Commerzbank has finalised the purchase of Dresdner Bank and become its sole shareholder," a statement to the markets said late on Monday. Dresdner Bank's former owner, the insurance group Allianz, now owns 165.3 million new Commerzbank shares, the statement added, around 14 percent of the bank's capital.
On Thursday, the German government became the dominant shareholder in the new Commerzbank with a stake of 25 percent plus one share following a second public aid plan worth €10 billion ($13.25 billion). As the financial crisis worsened, observers questioned whether Commerzbank would be able to go through with its takeover of Dresdner Bank.
The price and conditions were renegotiated in November after an initial agreement with Allianz was announced in September. Placed under pressure by the purchase, Commerzbank has called heavily upon a German banking sector stabilisation fund, which has provided it with two cash injections worth a total €18.2 billion and loan guarantees worth another €15 billion.
On Tuesday, the German financial market watchdog Bafin said it was checking whether Commerzbank respected regulations when it announced its partial nationalisation last week.
"We are checking whether the duty to communicate via stock market statements was respected" last week, a Bafin spokeswoman said. "The question is whether the statement was issued at the proper time," she added.
Late on Thursday, Commerzbank said in an "ad hoc" statement to markets that the German government would take a stake of 25 percent plus one share in the bank, the first time Berlin has bought equity in a private bank since the financial crisis erupted. But according to press reports, the agreement between Commerzbank and the state was reached during the night from Wednesday to Thursday, and Bafin wants to know why Commerzbank waited before issuing its statement.