Commerzbank shares fell more than 10% on Monday in a downbeat reaction from investors to its €9.8bn acquisition of Dresdner Bank, its domestic rival, from Allianz. The acquisition combines Germany’s second and third largest banks to create a domestic rival to Deutsche Bank, with 11m private customers. But some analysts questioned the acquisition price, the timing of the move and the resulting business mix for Commerzbank, which will finance the two-step €8.8bn acquisition through cash, its own shares and the transfer of assets to the insurance group. Allianz will become Commerzbank’s largest shareholder with a stake of about 30% on completion next year. Commerzbank will also put €975m into a trust to cover risks in Dresdner’s troubled ABS portfolio. In Lex’s view, however, “neither side is doing brilliantly out of the deal”. In an additional note, Lex examines the challenges for Martin Blessing, Commerzbank’s CEO.
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