Commerzbank AG / Acquisition/Capital Increase
31.08.2008
Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Commerzbank acquires Dresdner Bank and becomes the leading bank for private
and corporate customers in Germany
Commerzbank pays approximately EUR 8.8 bn,
around EUR 5 bn expected synergies
Allianz receives a payment into a trust solution for
specific ABS assets for Dresdner Bank of up to EUR 975 m
EUR 1.6 bn of purchase price in cash, remainder in shares, parts of
Commerzbanks asset management sold to Allianz for EUR 700 m
Placement of up to 65.4 m shares from capital increase, timing subject to
markets
9,000 full-time positions to be reduced in a socially responsible way,
nearly 67,000 employees at both banks at present
Allianz will take a stake of approximately 30 %, long-term cooperation
for insurance and investment products agreed upon
Martin Blessing: 'Excellent growth prospects for the new Commerzbank'
Commerzbank AG and Allianz SE have agreed upon the sale of 100 % of
Dresdner Bank AG to Commerzbank for approximately EUR 8.8 billion1). In
addition Allianz receives a payment into a trust solution for specific ABS
assets of Dresdner Bank of up to EUR 975 million. The Supervisory Boards of
Commerzbank and Allianz approved the agreement in their meetings on August
31, 2008. The transaction will occur in two steps and is expected to be
completed by the end of 2009 at the latest, subject to regulatory and
anti-trust approvals.
'We are taking advantage of a unique opportunity to make Commerzbank the
leading bank for private and corporate customers in Germany,' said Martin
Blessing, the bank's Chairman of the Board of Managing Directors. 'We are
building a market leader with European significance, and are creating added
value for our shareholders. At the same time, the deal will secure many
attractive jobs for the long term, even though unfortunately we cannot keep
all current positions.'
'This transaction is a milestone for banking consolidation in Germany and
strengthens the German economy,' said Michael Diekmann, Chief Executive
Officer at Allianz. 'With an approximate stake of up to 30%, Allianz will
be Commerzbank's largest shareholder and will gain access to its powerful
distribution network.'
'Commerzbank and Dresdner Bank are a terrific match we have outstanding
growth prospects and the most effective distribution platform in the German
banking industry,' explained Blessing. 'The new Commerzbank will become an
even more powerful and reliable partner for its clients.'
Commerzbanks successful business model will be continued
The new Commerzbank will focus on the following segments: Private and
Business Customers, Mittelstandsbank, Central and Eastern Europe,
Corporates & Markets (including Public Finance) and Commercial Real Estate.
Commerzbank will continue with the successful business model it has
developed during recent years. Its strategic positioning as a
customer-oriented major provider of financial services with a focus on
Germany and a strong foothold in Central and Eastern Europe will also
remain intact. The Private and Business Customers, the Mittelstand
businesses and the activities in Central and Eastern Europe will continue
to be the key drivers for growth. The two institutions represent strong
household brand names that will be intergrated during the course of the
integration.
In the Private and Business Customers segment, the new Commerzbank will be
the leading bank in Germany, with more than 11 million private clients.
Worldwide, the banks serve almost 14 million private customers. The
combined number of branches totals approximately 1,540. By 2012, it will
have approximately 1,200 branches. Overall, Commerzbank will own by far the
strongest branch network of all banks in Germany. 'We will be even more
easily accessible, we will offer an even more attractive range of products,
and we want to continue to enhance our joint market share,' said Blessing.
The two banks high net worth customer businesses complement each other.
Thanks to Dresdner Banks strength, the new Commerzbank is able surpass its
position to become the number 2 in the German market. Dresdner Bank will
contribute its national and international presence in which it has recently
made significant investments.
In the corporate customers segment, the leading German bank for small and
medium-sized enterprises (known as Mittelstand) will also further
strengthen its position. Following the acquisition, a total of
approximately 100,000 corporate customers will be served. With its focus on
the specific requirements of the German market, the Bank continues to be a
trusted long-term partner for companies and entrepreneurs. In addition, the
corporate customers business will also be combined, based on the profitable
business model developed by Commerzbank.
The significance of the Commercial Real Estate segment in terms of the
bank's balance sheet, will decrease following the acquisition of Dresdner
Bank. As before, the bank will continue to concentrate on increasing
profitability and reducing overall risk in this segment.
Corporates & Markets will in future also include the Public Finance
activities and will maintain its focused, customer-driven organization and
its conservative approach to risk. Dresdner Kleinwort's comparatively
broader activities will be reduced. With Dresdner Banks remaining
activities and its recognized high level of competency in securities,
Commerzbank continues to strengthen its position as a leading investment
bank for corporate, institutional and private customers. Following the
adjustments, approximately a net present value of EUR 1.4 billion in equity
capital will be released and used to support the profitable growth of other
segments.
No enforced redundancies until end of 2011
Together, Commerzbank and Dresdner Bank have nearly 67,000 employees. As a
result of the combination scheduled for the second half of 2009, some 9,000
full-time positions overall will become redundant, of whom 2,500 will be
outside Germany. Around 70 % of these relate to back office, control and
production units, as well as in investment banking. All measures available
for a socially-responsible approach will be used.
'We regret the job reductions, though they are unavoidable. However, only a
strong bank can offer secure jobs over the long term,' said Eric Strutz,
Chief Financial Officer and Chief Human Resources Officer of Commerzbank.
'We are looking for amicable solutions and will closely involve employee
representatives in all of the necessary measures this is part of our
corporate culture.'
Efficiency gains and synergies far outweigh restructuring costs
In the core business areas, Private and Business Customers and the
Corporate customer segments, the merger will lead to a strengthening of the
market position. Alongside the efficiency gains and synergies resulting
from the merger, it will also create excellent growth potential in both
Germany and the rest of Europe thus providing a decisive opportunity for
Commerzbank to further enhance its market value.
The takeover is already expected to have a positive impact on EPS from 2011
onwards. Overall restructuring costs totalling EUR 2 billion will be booked
in 2009. However, synergies amounting to EUR 5 billion to be realized
predominantly by 2011 are expected to offset this initial outlay. Based
on a purchase price of EUR 8.8 billion, the price/book ratio is
approximately 1.0x.
Takeover will take place in two steps
In the first step Commerzbank is expected to acquire at least 60.2 % of the
Dresdner Bank shares by the start of 2009 at the latest. Allianz in turn
will receive approximately 163.5 million new Commerzbank shares,
representing a stake of approximately 18.4 % in Commerzbank. Based on the
XETRA one month volume weighted average price (EUR 20.80 per share), these
shares are worth around EUR 3.4 billion. In addition, Commerzbank will pay
about EUR 1.6 billion in cash. Furthermore Commerzbank sells significant
parts of its asset management activities (cominvest) to Allianz for EUR 700
m. Commerzbank in turn receives shares in Dresdner Bank.
On August 31, 2008, the Board of Managing Directors and the Supervisory
Board of Commerzbank decided to issue 65,384,615 new shares, without
subscription rights and with full dividend entitlement for 2008. The shares
will be placed with institutional investors by means of an accelerated
placement. The timing of the execution of the capital increase and the
corresponding placement will be subject to market conditions. Following the
first step Commerzbank assumes a capital ratio (Tier 1) in excess of 7 %.
In step two, Dresdner Bank will be merged into Commerzbank. As a result,
Commerzbank will acquire Allianzs approximately 39.8 % remaining stake in
Dresdner Bank. In return, Allianz will receive Commerzbank shares from a
capital increase carried out as part of the merger. For this purpose an
Extraordinary General Meeting is planned for the beginning of 2009. The
merger is likely to be completed by the end of 2009.
Allianzs final stake will depend on the merger exchange ratio. As of
today, the Commerzbank/Dresdner Bank merger ratio is to be expected within
a range from 66:34 to 61:39. Following the completion of the whole
transaction, a tier 1 capital ratio of 7% to 8% will be targeted, for the
medium term. The midterm return on equity after tax should come at a
minimum of 15 %.
Commerzbank pays approximately EUR 8.8 billion for the acquisition. In
addition Allianz receives a payment into a trust solution for specific ABS
assets for Dresdner Bank of up to EUR 975 million. The final amount depends
on the development in value of selected portolios of Dresdner Bank. Only
the amount not realised as losses will be paid to Allianz in 2018.
Commerzbank is being advised by Commerzbank Corporates & Markets, Credit
Suisse, JP Morgan, KPMG and Mediobanca on the acquisition of Dresdner Bank.
Distribution cooperation with Allianz
In future, Commerzbank will exclusively offer Allianz insurance products.
This will provide Allianz with access to the approximately 11 million
customers of Germany's leading retail bank. Commerzbanks previous
partnership in the insurance sector with Generali will expire in 2010. In
Asset Management, Allianz Global Investors will be the preferred partner of
Commerzbank, hence the bank will sell significant parts of its asset
management activities to Allianz.
'With Allianz, we are pleased to have a strong shareholder supporting our
expansion strategy and offering attractive products for our customers,'
explained Commerzbanks Chairman of the Board of Managing Directors, Martin
Blessing. 'In the future we will also distribute our products via the
branches of the new bank. By doing so we further strengthen our
bancassurance business,' said Michael Diekmann, Chief Executive Officer of
Allianz. 'We want to accompany the new Commerzbank on its successful path
as a shareholder and cooperation partner. As a shareholder we stand to
benefit from its high value-added potential. As a cooperation partner we
will reap the rewards of its high-performance platform in the German
banking sector.'
'Together, we are taking a big step forward'
'Today, a new leading institution is being created from two strong
household brand names and together, we are taking a big step forward. We
will reach a new critical mass, benefit from economies of scale and
underline our claim to be the leading bank in Germany,' sums up Martin
Blessing, Chairman of the Board of Managing Directors. 'Going forward, the
bank is also prepared to seize value-creating growth opportunities in
Germany and in Europe.'
_______________________________________
1) Based on the volume weighted one month average XETRA price (EUR 20.80
per share) of the Commerzbank share.
***
A press conference will be held at 10:30 (CEST) on Monday, 1 September 2008
in the Auditorium of Commerzbank AG, Kaiserplatz, Frankfurt am Main. (Those
in attendance should use the auditoriums entrance at Große Gallusstraße
19.) At the press conference, Michael Diekmann, Herbert Walter, Martin
Blessing and Eric Strutz, will explain the transaction in detail.
***
This release contains statements concerning the expected future business of
Commerzbank, efficiency gains and synergies expected in connection with the
transaction, expected growth prospects and other opportunities for an
increase in value of the company as well as expected future net income per
share, restructuring costs and other financial data. These forward-looking
statements are based on managements current expectations, estimates and
projections. They are subject to a number of assumptions and involve known
and unknown risks, uncertainties and other factors that may cause actual
results and developments to differ materially from any future results and
developments expressed or implied by such forward-looking statements.
Commerzbank has no obligation to periodically update or release any
revisions to the forward-looking statements contained in this release to
reflect events or circumstances after the date of this release.
This release does not constitute an offer to sell or a solicitation of an
offer to buy shares of Commerzbank. Shares of Commerzbank may not be
offered or sold in the United States of America absent registration or an
exemption from registration under the U.S. Securities Act of 1933, as
amended. Commerzbank does not intend to conduct a public offering of shares
in the United States.
DGAP 31.08.2008
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Language: English
Issuer: Commerzbank AG
Kaiserplatz
60261 Frankfurt am Main Deutschland
Phone: +49 (069) 136 20
Fax: -
E-mail: ir@commerzbank.com
Internet: www.commerzbank.de
ISIN: DE0008032004
WKN: 803200
Indices: DAX, CDAX, HDAX, PRIMEALL
Listed: Regulierter Markt in Berlin, Frankfurt (Prime Standard),
Hannover, München, Hamburg, Düsseldorf, Stuttgart;
Terminbörse EUREX; Foreign Exchange(s) London, SWX
End of News DGAP News-Service
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DGAP-News: Commerzbank AG:Commerzbank acquires Dresdner Bank
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