Allianz said to be nearing decision on Dresdner sale

Aug 27 | Updated: Aug 28 2008, 05:50am hrs
Allianz SE, Europe's largest insurer, may decide this week whether to sell Dresdner Bank to Commerzbank AG or China Development Bank, three people with knowledge of the matter said.

Allianz and Commerzbank, Germany's second-biggest bank, may call supervisory board meetings by this weekend to discuss the sale, said the people, who declined to be identified because the talks are private.

A deal may value Frankfurt-based Dresdner at as much as 9 billion euro ($13.2 billion), analysts estimate.

Allianz, which bought the bank for 23.5 billion euro in 2001, put it up for sale this year after subprime-related losses at the Dresdner Kleinwort securities unit eroded profit. While Commerzbank is the preferred suitor, the Munich-based insurer is also in discussions with the state-owned China Development Bank, people involved in the talks said.

"Investors are waiting for a solution for Dresdner, so a sale would be positive even though Allianz waited too long," said Lutz Roehmeyer, who helps manage about $20.5 billion at Landesbank Berlin Investment, including Allianz and Commerzbank shares. "Allianz shouldn't hesitate to accept a price of around 9 billion euro."

Allianz fell 0.9% to 109.32 euro by 10:43 am in Frankfurt trading, bringing declines this year to 26%. Commerzbank slipped 0.4% to 19.87 euro, giving the lender a market value of 13.1 billion euro.

Spokesmen at Commerzbank, Dresdner and Allianz declined to comment.

Bloomberg