Allianz 'likely to sell Dresdner this week'

27 August 2008

The fate of Dresdner Bank is to be decided this week, Bloomberg reports.

According to three separate insiders, Allianz, the insurance giant which owns Dresdner, is to decide on whether to sell the firm to Commerzbank or the China Development Bank within days.

Analysts have previously estimated the worth of such a deal at around $13.2 billion.

The anonymous sources also confirmed that, should Commerzbank get the nod, board meetings to run through the details of the sale are likely to convene this weekend.

Allianz is understood to be willing to sell the bank, due to the severe erosion of value it has suffered with the credit crunch.

Dresdner has significant exposure to the sub-prime mortgage market in the US, which went into meltdown last summer and sparked the global financial crisis.

Commenting on the situation, Berlin-based Landesbank asset manager Lutz Roehmeyer said: "Investors are waiting for a solution for Dresdner, so a sale would be positive even though Allianz waited too long.

"Allianz shouldn't hesitate to accept a price of around [$13 billion]."

Allianz originally bought Dresdner in 2001 for €23 billion.

The current proposed sale price stands at €9 billion.

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