M & A of the Commerzbank and Dresdner Bank

Term Paper, 2009

13 Pages, Grade: 1,0


Table of Content

1. Introduction

2. Definition Merger and Acquisition

3. Facts and Figures Commerzbank and Dresdner Bank
3.1. Commerzbank
3.2. Dresdner Bank
3.3. Chances and risks of the merger
3.4. Chances
3.5. Risks

4. Acquisition process
4.1. Situation August 31st
4.2. Situation November 28th
4.3. Situation December 31rst
4.4. Situation January 8th
4.5. Situation January 12th
4.6. Situation February 27th
4.7. Situation May 15th

5. Dresdner Kleinwort

6. Interest from the East

7. Allianz

8. Outlook

II. Bibliography

1. Introduction

The current financial crisis has caused governments and central banks to compete, who will achieve the biggest bail-out- and economic stimulus package including the lowest interest rates. These are supposed to slow down the worldwide recession and avoid a deflation. The current crisis has parallels to the “great depression” in the 1930th and therefore is also called the “great re-pression”.

The German Government has also installed a safety shield, worth 480 billion Euro for financially suffering banks and financial institutions.

Thus, the Financial Markets Stabilization Act was created. It only took a week to pass the bill which is unknown off in Germany and therefore shows the importance of this law. It enables the government to act further than the German Basic Law would allow.

The Commerzbank was the first German bank to claim a part of governments help. This was due to high losses in the 4th quarter of 2008 and the acquisition of Dresdner Bank.

2. Definition Merger and Acquisition

Merger and acquisition (M&A) are considered as company transactions, such as company acquisitions, company sales or company mergers. The worldwide growing amount and volumes of company transactions created an own M&A market. That is why these days, the term M&A is also applied for services, especially consulting services for company transactions. The amount and the volume of M&A’s is an important indicator for the consolidating within the sector of business and therefore enable forecasts for the future development of the sectors.

3. Facts and Figures Commerzbank and Dresdner Bank

3.1. Commerzbank

In 2008 Commerzbank AG employed 43.169 people and thereof 65,8% percent worked in Germany. Their total was €625.2 billion, almost 200 billion more than in 2004. With six million private customers and about 820 branch banks, Commerzbank is one of the top five banks with private customers; with 7% percent market share it’s already one of the big financial institutions for small and medium sized companies1.

3.2. Dresdner Bank

In 2008, Dresdner Bank employed 27,597 people and managed to establish a total of €500 billion. This makes the Dresdner Bank the third biggest in Germany. After a merger with Deutsche Bank failed in 2001, Allianz bought Dresdner Bank. Due to restructuring, almost 50% percent of the staff were fired2.

3.3. Chances and risks of the merger

First of all, the “New Commerzbank” which will be its name after the merger with the Dresdner Bank, is planning to realize synergy effects up to €5 billion per year. These are said to be fully achieved by 2012 and can be justified by the following:

3.4. Chances

- Customers: The New Commerzbank will have 11 million private customers, making them the biggest player in this sector.
- Branch banks: By combining Commerzbank’s existing 820 branches with the 720 of Dresdner Bank, the New Commerzbank will own a total network of 1,540 branches in Germany. This moves them in Germany from spot four and five up to first spot in front of Deutsche Bank with only 986 branches.
- Small and medium sized companies: After the merger, market share will grow from 7% percent to 11%-13% in this sector, which creates a strong partner for the German economy3.
-Competitors: Due to the
consolidation of the banks, Germany might finally have a bank strong enough to compete on international markets, instead of being a potential object of interest for foreign investors4.
- The purchase of Dresdner Bank from Allianz, the leading German insurance company, suggests benefits for both organizations. New Commerzbank will gain a strong partner in the insurance sector and the Allianz will have access to 11 million customers5.

3.5. Risks

- Employees: 9.000 people will have to leave the company – 6,500 of these in Germany, but New Commerzbank wants to avoid redundancy due to business operations. The merger of headquarters alone will cost 2,200 working spots, and additionally all members of Dresdner Bank, board except for the bank’s former CEO, Walter. This could have a major influence on the motivation of Dresdner Bank’s employees6.

illustration not visible in this excerpt

Table 1 Germany largest financial institutions


1 Cf. https://www.commerzbank.de/de/hauptnavigation/aktionaere/zahlen
fakten/commerzbankinzahlen.html 30.04.09

2 Cf. http://www.dresdner-bank.de/dresdner-bank/zahlen-und-fakten/geschaeftsbericht/downloads /08-finanzbericht-konzern.pdf 03.05.09

Philipp Gauß - Business English - M & A of the Commerzbank and Dresdner Bank


3 Cf. http://www.spiegel.de/wirtschaft/0,1518,617713,00.html 18.04.09

4 Cf. http://www.spiegel.de/wirtschaft/0,1518,575482,00.html 16.04.09

5 Cf. https://www.commerzbank.com/media/aktionaere/vortrag/2008/commerzbank010908DE.pdf 16.04.09

6 Cf. http://www.wiwo.de/unternehmer-maerkte/dresdner-bank-verschwindet-als-marke-305814/ 16.04.09

Excerpt out of 13 pages


M & A of the Commerzbank and Dresdner Bank
European School of Business Reutlingen
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ISBN (Book)
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M&A, Commerzbank, Dresnder Bank, Merger, Acquisition
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Philipp Gauß (Author), 2009, M & A of the Commerzbank and Dresdner Bank, Munich, GRIN Verlag, https://www.grin.com/document/138062


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