September 2, 2008

Germany’s Commerzbank Shares Slump After Dresdner Deal

Germany's Commerzbank shares slump after Dresdner deal

BERLIN, Sept. 1 (Xinhua) -- Shares of Germany's Commerzbank AG dropped sharply on Monday at the Frankfurt Stock Exchange after it agreed with Dresdner Bank on a merge deal a day earlier.

The share price of the Frankfurt-based Commerzbank stock slumped 10.85 percent to 17.91 euros (26.1 U.S. dollars) in Frankfurt Stock Exchange at 16:25 local time (15:25 GMT), while that of Dresdner Bank also slipped by 2.11 percent at 63.45 euros (92.6 dollars).

Earlier on Sunday, the supervisory boards of Commerzbank and Allianz, which is Dresdner's parent company, signed off on merging Germany's second and third biggest banks at separate meetings.

According to the sale deal, Commerzbank AG agreed to pay 9.8 billion euros (14.4 billion dollars) to buy Dresdner Bank.

Local press said that Monday's fall in Commerzbank shares reflected investors' concerns about the high price paid by the bank for Dresdner and the integration costs resulting from acquiring its former competitor.

Forging the new Commerzbank-Dresdner banking group will also result in the loss of 9,000 jobs from the two banks' combined workforce of 67,000 and a drastic reduction in their branch numbers from 1,900 to 1,200.

With total assets of about 1.09 trillion euros (1.59 trillion dollars) and 11 million German customers, the Commerzbank-Dresdner bank will result in the emergence of a new banking force in Europe's biggest economy.

Deutsche Bank, which failed in a bid to merge with Dresdner eight years ago, will remain the country's largest bank, with assets totaling about 2 trillion euros (2.92 trillion U.S. dollars).

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