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.
[...]
Table of Contents
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 2008
4.2. Situation November 28th 2008
4.3. Situation December 31rst 2008
4.4. Situation January 8th 2009
4.5. Situation January 12th 2009
4.6. Situation February 27th 2009
4.7. Situation May 15th 2009
5. Dresdner Kleinwort
6. Interest from the East
7. Allianz
8. Outlook
Objectives and Topics
This paper examines the merger process between Commerzbank and Dresdner Bank within the context of the global financial crisis. It analyzes the strategic motivations, the structural shifts in the banking sector, and the role of government intervention through the Financial Markets Stabilization Act.
- Evolution of the acquisition strategy and purchase price adjustments.
- Impact of the merger on market position and synergy expectations.
- Role of government involvement and partial nationalization.
- Analysis of external interest from international investors.
- Evaluation of risks regarding employee redundancy and integration.
Excerpt from the Book
4. Acquisition process
The acquisition of the Dresdner Bank was changed over the last month in regards to timing and the purchasing price. The following paragraphs will show these changes:
4.1. Situation August 31st 2008
The purchase of the Dresdner Bank, which estimated to cost Commerzbank €9.79 billion, was planned to happen in two steps. The first step would have included Commerzbank buying 60,2% percent of Dresdner Bank for €5.666 billion. This number would have consisted of €1.565 billion in cash, and 163 million shares with an issue price of €20,80 per share of the Commerzbank with a value of €3,401 billion which represent 18,4% of all shares. Subtracted from the price would have been the sale of Cominvest, the investment branch of Commerzbank, for €700 million to Allianz.
The second step, the merger of Commerzbank and Dresdner Bank, would have included Allianz receiving shares worth €3.151 billion causing their share percentage to rise to approximately 30% percent. The remaining €975 million estimated to reach €9.79 billion would have been considered as protective shield for the Asset-Backet Securities (ABS) of Dresdner Bank.
Chapter Summaries
1. Introduction: Outlines the impact of the global financial crisis and the German government's reaction via the Financial Markets Stabilization Act.
2. Definition Merger and Acquisition: Defines M&A as a crucial indicator for business sector consolidation and future development forecasts.
3. Facts and Figures Commerzbank and Dresdner Bank: Provides a comparative overview of both banks' employees, branch networks, and market shares prior to the merger.
4. Acquisition process: Chronicles the chronological changes in strategy, timing, and financial terms of the takeover from August 2008 to May 2009.
5. Dresdner Kleinwort: Analyzes the restructuring of the former investment banking arm and the resulting personnel reductions.
6. Interest from the East: Discusses the competition from the China Development Bank and the preference for an internal German solution.
7. Allianz: Examines Allianz's role in the divestment of Dresdner Bank and the future strategic cooperation between Allianz and Commerzbank.
8. Outlook: Critically evaluates the success prospects of the merger in light of historical failures and the need for process integration.
Keywords
Commerzbank, Dresdner Bank, Merger and Acquisition, Financial Crisis, Government Intervention, SoFFin, Allianz, Banking Sector, Synergy, Restructuring, Investment Banking, Market Share, Financial Stabilization, Economic Stimulus, Corporate Strategy
Frequently Asked Questions
What is the primary focus of this paper?
The paper focuses on the merger between Commerzbank and Dresdner Bank, analyzing how the global financial crisis influenced the transaction terms and necessitated government intervention.
What are the core thematic areas discussed?
Key themes include the acquisition timeline, the role of Allianz, the intervention of the German government's stabilization fund (SoFFin), and the competitive landscape involving foreign investors.
What is the central research question?
The paper explores how the financial crisis fundamentally altered the merger process and what the implications of partial state nationalization are for the resulting entity.
Which methodology is applied?
The research is based on a descriptive analysis of business facts, financial reporting, and chronological process evaluation derived from industry publications and financial news.
What does the main body cover?
It details the strategic shifts in the takeover, the risks regarding synergy effects, employee layoffs, and the specific restructuring of the Dresdner Kleinwort branch.
Which keywords characterize the work?
Significant keywords include M&A, Commerzbank, SoFFin, Financial Crisis, and Synergy.
Why was the China Development Bank considered a competitor?
The China Development Bank offered a higher purchase price and promised job security, making it a viable but ultimately rejected alternative to the internal German merger.
What was the role of Allianz in this transaction?
Allianz, as the former owner of Dresdner Bank, sought to divest to consolidate losses and established a 15-year strategic partnership with Commerzbank for insurance distribution.
How did the government influence the merger?
Through SoFFin, the German government provided silent participations and capital increases, effectively becoming a major shareholder to prevent a foreign takeover and stabilize the financial system.
- Citar trabajo
- Philipp Gauß (Autor), 2009, M & A of the Commerzbank and Dresdner Bank, Múnich, GRIN Verlag, https://www.grin.com/document/138062
