Allianz already owns around 58 per cent of AGF, and wants to buy the rest of the company for around $13 billion.
Allianz has stated that AGF has responded "favorably" to the takeover bid, which will involve a complete cross-border merger of AGF and Allianz.
Commenting on the deal, Michael Diekmann, Allianz chief executive, said that AGF constituted a large part of his company's operations in Europe - now the main area of concentration for the company.
"With the transformation of Allianz into a European Company we have made it clear that Europe is our home market," he said.
"The buyout of AGFâ¦ will help us create an even stronger platform to serve our European clients and further enhance our operating profitability."