Germany Bank Mergers & Acquisitions (HypoVereinsbank)

Photo: HypoVereinsbank’s (HVB Group) head office building Hypo-Haus in Munich, Germany.
Photo source: UniCredit HVB's web site.

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HVB Group and its Bank Austria Creditanstalt subsidiary were taken over by Italy's UniCredit SpA in 2005.



HypoVereinsbank / HVB Group AG (a subsidiary of Italy's UniCredit SpA)


Bayerische Hypotheken- und Wechsel-Bank (Hypo-Bank)

In 1835, King Ludwig I of Bavaria signed a decree authorizing the establishment of Bayerische Hypotheken- und Wechsel-Bank (“Bavarian Mortgage and Exchange Bank”). As its name suggests, the bank’s main focus was on mortgage lending and commercial lending (discounting bills of exchange for businesses). The bank made its first securities underwriting deal in 1879 when it participated in a syndicated bond issue to finance the Bavarian railroad.

In 1889, Bayerische Hypotheken- und Wechsel Bank joined the much larger Deutsche Bank, Disconto-Gesellschaft and other partner banks to create the Deutsch-Asiatische Bank in the Chinese port city of Shanghai. China during the late 19th century was very weak and foreign countries seized the chance to impose preferential trading rights and to establish colony-like territories in China for their industrial and commercial exploitation. Deutsch-Asiatische Bank was only one of a dozen or so British, French, Belgian, Dutch, German, Russian, Portuguese, Scandinavian, Japanese and American banks that created subsidiaries in China to further the economic interests of their home countries.

By 1908, Hypo-Bank (as Bayerische Hypotheken- und Wechsel-Bank was commonly known) had become the leading mortgage lender in the country but Germany soon plunged into 50 years of turbulence. The outbreak of World War I in 1914 embroiled Europe, Africa and the Middle East in deadly battles as rival European powers and the Ottoman Empire invoked defence alliances and declared war upon each other and their overseas colonies. The four-year war led to some 35 million casualties and ended four major imperial powers, including the German Empire.

After its defeat, Germany suffered a decade of economic and social turmoil. In 1922, radical currency devaluation and a massive increase in money supply led to the infamous hyper-inflation, which made the German mark practically worthless. The hyper-inflation then fuelled a consumption boom, as consumers and businesses alike would rather fully spend the paper money that they received daily, than to hold on to it overnight when it was worth even less the following day. The sky-high inflation rendered Hypo-Bank’s main business of mortgage lending meaningless, as repayments made by borrowers became worthless to the bank due to the much diminished purchasing power of money. Meanwhile, in order to pay the Treaty of Versailles reparations, Germany borrowed heavily from foreign banks and creditors during the 1920s.

Conditions worsened as the 1920s drew to a close when the American stock and real estate markets crashed in October 1929. Foreign creditors withdrew their credit to Germany as loan losses mounted. Then in May 1931, Austrian bank Credit-Anstalt became insolvent due to years of excessive lending, poor management and the cruimbling economy, sending more shocks to the German public. In July, the panic reached its peak in Germany and led to a general run on the nation’s banks. The government imposed a forced, two-day shutdown of all banks on July 14 and July 15, 1931, to restore order in the banking industry.

Ironically, it was the rise of Nazism and rearmament spending that lifted the German economy in the mid-1930s. Lives and economic development were once again devastated across the world by World War II, when Japan invaded China in 1937, and Germany invaded Poland in 1939.

Hypo-Bank wrote off numerous mortgage loans and properties as millions of people were displaced and cities and towns were destroyed during the war. Peace returned in 1945 but things only slowly began to improve in 1947 after the signing of the European Recovery Plan (commonly known as the Marshall Plan), which saw the United States providing USD $12-billion in aid for Western Europe to rebuild the devastated areas. As the German economy boomed, Hypo-Bank greatly expanded its network of branches in the 1960s and 1970s. In the 1980s, the bank formed alliances with other European banks to offer syndicated loans internationally. These alliances allowed smaller European banks to participate international financings that were otherwise too big and too risky for them to offer on their own individually.

The year 1990 was an important one for German history as the collapse of the communist Soviet Bloc led to the reunification of the two Germanys. Hypo-Bank moved aggressively into the East German mortgage market in the early 1990s, a move that the bank would later regret. The bank, however, made the right move by also entering the Eastern European market. In 1992, it set up a subsidiary in Czech Republic; one year later, more subsidiaries were created in Hungary, Poland and Slovakia.


Bayerische Vereinsbank

In 1869, King Ludwig II of Bavaria granted a licence to a group of Munich private bankers to establish the Bayerische Vereinsbank. The bank set out to serve the rapidly industrializing Bavarian economy. In 1870, it issued a loan to finance the building of the Bavarian railway and one year later, began to issue real estate loans. For the next 100 years, Bayerische Vereinsbank remained largely regional in nature compared with the Berlin-based grossbanken (Big Banks) such as Deutsche Bank and Dresdner Bank.

Following World War I, the German economy went into a tailspin and Bayerische Vereinsbank responded by forming alliances with several banks in Berlin and Bavaria. These alliances typically involved cross-minority-shareholdings between the smaller banks, as well as cross-representation on each other’s boards of directors. By adopting this strategy, these smaller banks were able to preserve their independence by making themselves unpalatable to the grossbanken, and yet the alliances allowed them to assist each other financially in times of crisis.

In the aftermath of World War II, the grossbanken like Deutsche Bank, Dresdner Bank and Commerzbank were found guilty of war crimes in financing the Nazi war machine and were broken up into many smaller banks. Regional banks like Bayerische Vereinsbank and Bayerische Hypotheken- und Wechsel-Bank were spared and allowed to operate freely. In 1969 Bayerische Vereinsbank first proposed to combine with its rival Bayerische Hypotheken- und Wechsel-Bank to compete with the grossbanken. Talks however broke off in 1971 when the Bavarian state government insisted that the Bayerische Staatsbank be part of a three-way merger. Subsequently, Bayerische Vereinsbank did end up acquiring Bayerische Staatsbank alone.

In the 1970s Bayerische Vereinsbank finally forayed into the international scene when offices were opened in Rio de Janeiro, Tokyo, Tehran, New York, Chicago, Paris, Johannesburg, London and Hong Kong.

In 1989, Bayerische Vereinsbank joined four other Western European banks (Austria’s Creditanstalt-Bankverein, Banca Commerciale Italiana, France’s Credit Lyonnais and Finland’s Kansallis-Osaki-Pankki) as well as three state-owned Soviet banks (Vneshekonombank, Sberbank and Promstroibank) to establish the International Moscow Bank. It was the first ever Soviet-based bank funded partly by western capital. (Both Bayerische Vereinsbank and Creditanstalt-Bankverein became part of the HVB Group, and HVB Group and International Moscow Bank both became part of UniCredit.)

Recent transaction(s):

• In 1992, Bayerische Vereinsbank acquired Austria’s Schoeller & Co. Bank, a private bank with 13 branches.
• In 1997, Bayerische Vereinsbank and Bayerische Hypotheken- und Wechsel-Bank announced their merger agreement. The move was to pre-empt a rumoured takeover of Bayerische Vereinsbank by Deutsche Bank and of Bayerische Hypotheken- und Wechsel Bank by Dresdner Bank. The merger was completed in 1998 and the new bank took up a new name: Bayerische Hypo- und Vereinsbank, to be commonly known as HypoVereinsbank.
• Between 1998 and 1999, HypoVereinsbank acquired majority control of Poland’s Bank Przemyslowo-Handlowy (BPH); HypoVereinsbank then merged its own Polish operations BV Polska and Hypo-Bank Polska into the newly-acquired BPH.
• In 2000, HypoVereinsbank acquired Bank Austria Creditanstalt (BA-CA) for Euro 7.8-billion (USD $7.3-billion). BA-CA was Austria’s largest bank with 280 domestic branches, plus another 400 branches across Central and Eastern Europe.
• In 2001, HypoVereinsbank merged its own Polish operations BPH with Bank Austria Creditanstalt’s Polish subsidiary Powszechny Bank Kredytowy (PBK) to form BPH PBK S.A., one of the largest banks in the country.
• In 2001, HypoVereinsbank transferred its Central and Eastern European operations to its BA-CA subsidiary.
• In 2002, Bayerische Hypo- und Vereinsbank changed its name to HVB Group.
• Also in 2002, HVB’s BA-CA subsidiary bought Bulgaria’s Bank Biochim.
• Also in 2002, HVB’s BA-CA subsidiary bought 62.6% of Croatia’s Splitska Banka from UniCredito Italiano for Eur 94-million. In 2005, Splitska Banka became part of UniCredito Italiano once again when the Croatian bank's parent HVB Group was taken over by UniCredito Italiano.
• In 2003, amidst mounting loan losses at HVB Group due to a wave of corporate bankruptcies resulting from the “tech bust” and the September 11 fallouts, HVB raised Euro 958-million cash by re-floating 22.5% of Bank Austria Creditanstalt on the Vienna and Warsaw stock exchanges.
• In 2004, HVB’s BA-CA bought Bulgaria’s Hebros Bank.
• Also in 2004, HVB’s BA-CA bought Serbia’s Eksimbanka.
• Also in 2004, HVB Group contributed 2/3 of a USD $100-million capital injection for International Moscow Bank and raised its stake to 52.9%, wrestling control of the Russian bank from its other Swedish and French minority shareholders.
• In 2005, UniCredito Italiano bought HVB Group for Euro 15.4 billion (USD $19.4-billion). In addition, UniCredito Italiano also made an offer to buy out the 22.5% of Bank Austria Creditanstalt held by the public for Eur 2.63-billion, as well as the 29% of Poland's Bank BPH PBK held by the public for about Eur 1.48-billion. The three offers totalled about Eur 19.5-billion (USD $24.5-billion). HVB Group already owns 77.5% of Bank Austria Creditanstalt and 71% of Bank BPH PBK.
• Subsequently, however, the Polish banking regulator vetoed UniCredito Italiano's bid to privatize Bank BPH PBK for Eur 1.55-billion. UniCredito Italiano withdrew its offer for the Polish bank in early 2006, but still indirectly held 71% of the bank through its acquisition of Germany's HVB Group.

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Germany Bank Mergers & Acquisitions (Commerzbank)

Photo: A Commerzbank AG branch in Kiel, Germany.

With special thanks to my very good friend "Vovchychko" of Germany, who gave me permission to use this photo. You can view his other photos by clicking on this link: http://www.flickr.com/photos/schneelocke/

Commerzbank AG

The Commerz- und Disconto-Bank in Hamburg was established in 1870 by a number of German merchants and private banks. As its name suggests, the bank’s mandate was to serve Germany’s burgeoning manufacturing and import-export sectors. In 1871, the bank was one of the founding members of Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft (Hamburg - South America Steamship Company, now known as Hamburg Süd).

In 1873, Commerz- und Disconto-Bank in Hamburg subscribed to a majority capital of the new London and Hanseatic Bank, establishing a presence in London, the then financial centre of the world.

In the 1890s, Commerz- und Disconto-Bank was a major backer of the construction of electric utilities in Nürnberg (Nuremburg) and Hamburg. In 1897, the bank took over Frankfurt-am-Main-based private bank Bankhaus J. Dreyfus & Co., including its Berlin branch. With the expansion outside of Hamburg, the bank formally dropped the “in Hamburg” reference from its name in 1898.

In 1905, Commerz- und Disconto-Bank’s head office was moved from Hamburg to Berlin when it took over the Berliner Bank.

When World War I broke out in 1914, the bank lost its stake in London and Hanseatic Bank. Needless to say, the War devastated normal lives and business across much of Europe.

Between 1917 and 1923, Commerz- and Disconto-Bank acquired more than 40 regional and private banks across Germany, the most important of which was the Mitteldeutsche Privat-Bank with its 90-branch network. When the transaction completed, the bank adopted the new name Commerz- und Privat-Bank.

Following the end of World War I, Germany went through a decade of economic upheavals which included the infamous hyper-inflation in the early 1920s. Still, between 1923 and 1924, the bank made acquisitions in the Netherlands and Latvia, and opened an office in New York in 1927.

Following the Wall Street Crash of 1929, the German economy, like many others in the Western world, went into a tailspin. Commerz- and Privat-Bank merged with Mitteldeutsche Creditbank in this same year.

The Great Depression in the early 1930s saw personal consumption, industrial output and international trade contracting, causing unemployment to soar to 30% in Germany. Then in May 1931, one of Austria’s largest banks, Credit-Anstalt, collapsed, sending shock waves across the world. As the entire German banking sector teetered on the brink of collapse, the government decreed that all banks be closed on 1931-07-13 and 1931-07-14 to stem panic bank runs. In 1932, the ailing Barmer Bank-Verein Hinsburg, Fischer & Comp. was merged into Commerz- und Privat-Bank; meanwhile, the Reich government re-capitalized Commerz- und Privat- by acquiring 70% of the bank’s enlarged capital. Between 1936 and 1937, the government re-floated Commerz- und Privat-Bank to private shareholders.

Under pressure from the new Nazi government, Commerzbank began to let go its Jewish staff in 1933. By 1938, all Jewish staff had been ousted from the bank. To comply with new discriminatory legislation, Commerz- und Privat- also took part in expropriating Jew-owned properties and stopped dealing with Jewish clients. Soon after World War II broke out in 1939, the bank commenced operations in German-occupied Netherlands, Belgium, the Baltic states and southeastern Europe. In 1940, the bank shortened its name to Commerzbank AG.

Following six years of intense fighting, 60-million deaths and utter devastation around the world, Germany, Japan and Italy were finally defeated in 1945. Commerzbank lost its operations in the Soviet zone of Germany (later East Germany), the occupied territories, as well as its head office in Berlin, as the former German capital was also split into the Soviet Zone (later East Berlin) and the American, British and French zones (later West Berlin). Of the 359 domestic branches in existence in 1940, 161 were lost to the Soviets. Even within the American, British and French zones (later West Germany), the Liquidation Commission broke up the large German banks (Deutsche, Dresdner and Commerzbank) into much smaller entities to ensure that they would never be big enough to finance a war machine again. Commerzbank was split into nine small separate banks in 1947. Meanwhile, in West Berlin, Bankhaus Holbeck KG began operations in 1949.

In 1952, the nine small banks were allowed to re-group into three regional banks, namely: Bankverein Westdeutschland (Düsseldorf), Commerz- und Disconto-Bank (Hamburg) and Commerz- und Credit-Bank (Frankfurt-am-Main). Meanwhile, Berlin’s Bankhaus Holbeck became Berliner Commerzbank. Between 1952 and 1955, the three regional banks opened their first post-World War II foreign representative offices in Amsterdam, Madrid and Rio de Janeiro. In 1956, Bankverein Westdeutschland was re-grouped as Commerzbank-Bankverein.

In 1958, Düsseldorf-based Commerzbank Bankverein took over Commerz- und Disconto-Bank and Commerz- und Credit-Bank. The new bank revived the Commerzbank AG name, which was previously in use between 1940 and 1947.

Commerzbank listed its shares on the London stock exchange in 1962, marking the bank’s first listing abroad. The bank then acquired a minority interest in Korea Exchange Bank in 1967. In 1968, Commerzbank and a number of other European banks jointly introduced a cheque-guarantee card, launching the Euro-Cheque product. During the 1970s, the bank began to actively re-build its former expertise in international corporate and public finance by opening branches in New York, London, Chicago, Paris, Brussels, Tokyo and Hong Kong.

In 1971, majority interests in real estate lenders Rheinische Hypothekenbank and Westdeutsche Bodenkreditanstalt were acquired. (Commerzbank first took a minority stake in Rheinische Hypothekenbank in 1960.) Commerzbank’s interest in Rheinische Hypothekenbank (commonly known as RHEINHYP) was gradually raised to almost 100% over the years. In 1974, the two real estate lenders were combined.

In the 1980s, Commerzbank expanded operations in the Netherlands and Switzerland, as well as acquired 10% of Spain’s Banco Hispano-Americano (1984) and 10% of Brazil’s Unibanco (1988). The end of the 1980s was marked by the 1989 fall of the Berlin Wall and the collapse of Communism in the Soviet Union and Eastern Europe. As soon as East Germany and West Germany re-unified in 1990, Commerzbank promptly opened branches in 50 former East German locations. In 1992, the West Berlin subsidiary Berliner Commerzbank was integrated into the parent bank. The bank also expanded into other former Eastern European countries such as Hungary and Czechoslovakia. In Poland, Commerzbank acquired a majority stake in Bank Rozwoju Eksportu (BRE) in 1994. In the same year, it also bought a 51% interest in Hypothekenbank in Essen AG.

In 1995, an on-line retail securities broker cominvest was established, which grew into Germany’s leading on-line broker.

Recent transaction(s):

• In 2000, shortly after merger talks failed between Deutsche Bank and Dresdner Bank, Commerzbank and Dresdner Bank entered merger discussions but they also failed to conclude.
• In 2002, Commerzbank merged its RHEINHYP holdings with Deutsche Bank’s and Dresdner Bank’s real estate lenders to form EuroHypo AG, in which all three German banks held a stake.
• In 2005, Commerzbank bought out the 66.2% of EuroHypo AG that it didn’t yet already own for Eur 4.65-billion from its two other shareholders Deutsche Bank and Dresdner Bank. With the EuroHypo purchase, Commerzbank became the No. 2 bank in Germany. Prior to the sales, Deutsche Bank had owned 37.7% of EuroHypo, whereas Dresdner Bank had owned 28.5% of the real estate and public finance lender.
• In 2007, Commerzbank sold its British-based asset management division Jupiter to its management and TA Associates for about Eur 1-billion (GBP 740-million). Jupiter had GBP 19.2-billion of assets under management.
• Also in 2007, Commerzbank bought 60% of Ukraine's Bank Forum for Eur 435-million (USD $600-million). Bank Forum served 230,000 retail and 12,000 business clients through 230 branches.
• Also in 2007, Commerzbank sold its Paris-based asset management firm Caisse Centrale de Reéscompte SA (CCR) to UBS for Eur 435-million.
• Also in 2007, Commerzbank bought out the 49% minority interest in Hypothekenbank in Essen AG (known as Essen Hyp). Commerzbank had owned 51% of Essen Hyp since 1994. In 2008, Essen Hyp was integrated into Commerzbank's other wholly-owned commercial real-estate and infrastructure (public finance) lender EuroHypo AG.
• In August 2008, Commerzbank agreed to buy the weakened Dresdner Bank from insurance giant Allianz SE for Eur 8.8-billion (USD $12.81-billion). Dresdner’s investment unit Dresdner Kleinwort had been badly hurt by the 2008 global banking crisis. The purchase price consisted of Eur 1.6-billion in cash, Eur 6.5-billion in Commerzbank shares, and the cominvest division valued at Eur 700-million. In addition, Commerzbank agreed to make a maximum Eur 975-million payment to Allianz to cover potential future losses from some sub-prime securities that Allianz was exposed to, bringing the potential total value of the deal to Eur 9.775-billion (USD $14.23-billion).
• Following a turbulent summer which saw global financial asset prices tumbling, Commerzbank in November 2008 revised its agreement to buy Dresdner Bank. Commerzbank had already acquired 60% of Dresdner in August for Eur 1.6-billion in cash, Eur 2.75-billion in stock and the cominvest division valued at Eur 700-million. Instead of issuing another Eur 3.75-billion of stock and insuring Eur 975-million of potential sub-prime losses, Commerzbank immediately acquired the remaining 40% of Dresdner from Allianz for Eur 1.65-billion in cash. The amendment reduced the value of the entire Dresdner Bank acquisition to Eur 6.7-billion (USD $8.93-billion). Dresdner Bank’s 1,000 branches would become Commerzbank though branch closures were expected.
• In January 2009, the German financial stabilization fund SoFFin agreed to guarantee up to Eur 15.0-billion (USD $20.34-billion) of a new Commerzbank’s bond issue in exchange for new ordinary shares representing 25% of the enlarged capital for Eur 1.77-billion.
• Commerzbank received Eur 8.2-billion (USD $11.2-billion) of capital from SoFFin in November 2008 with no voting privilege.
• In September 2009, Commerz returned the remaining Eur 5-billion (USD $7.2-billion) of unused debt guarantees to SoFFin. Commerzbank tapped and issued Eur 5.0-billion of government-backed bonds in early 2009. The remaining Eur 10-billion of debt guarantees were not needed and returned to the German government in late 2009.
• In October 2009, Commerzbank sold Kleinwort Benson Private Bank to Belgian private-equity firm RHJ International for GBP 225-million (USD $365-million). Kleinwort Benson had GBP 5.4-billion of assets under management and another GBP 15.7-billion of assets under administration.
• In March 2010, Commerzbank acquired another 26.25% in Ukraine’s Bank Forum for an undisclosed amount. Commerz had held 63% of the bank since early 2008.
• In early 2012, as a condition to receive state aid from Germany, Commerzbank agreed to shut down its EuroHypo public finance and mortgage subsidiary by 2014.  Now known as Hypothekenbank Frankfurt, the former EuroHypo suffered billions of losses from bad loans made during the boom times of 2000s.
• In October 2012, Commerzbank sold its 96% stake in Ukraine's Bank Forum to Ukrainian Smart Group for an undisclosed amount.  Ukraine has been suffering from severe social, political and economic turmoil due to the separatist uprising from its Russian minority in the eastern part of the country.
• In September 2024, UniCredit acquired a 9% equity stake in Germany's Commerzbank, a 4.5% stake from the German government and 4.5% from public shareholders. Shortly after that, UniCredit disclosed that through the use of derivatives, it controlled a potential 21% economic stake in the German bank, skirting the regulatory approval normally required when controlling more than a 9.9% interest in a German financial institution. UniCredit was seeking approval from the authorities to buy up to 29.9% of Commerzbank. German law requires a full mandatory takeover offer be made when ownership surpasses the 30% threshold. Key ownership thresholds, including 10%, 20%, 30%, and 50%, all require approval from the ECB. However, German Chancellor Olaf Scholz and top Commerzbank executives have come out expressing strong opposition to UniCredit's takeover proposal to create a massive cross-border European bank as "an unfriendly attack.".

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Germany Bank Mergers & Acquisitions (Deutsche Bank)

Photo: A Deutsche Bank office in Kiel, northern Germany.

With special thanks to my German friend, who preferred to be known as "Li'l Wolf", for permitting me to use his photograph. You can see more of his photos via this link:

http://www.flickr.com/photos/schneelocke/


Deutsche Bank AG

Upon the authorization of its articles of incorporation by the King of Prussia, Deutsche Bank was established in Berlin in 1870. Its goal was to transact banking business to promote trading between Germany and other nations. Germany at the time was undergoing a major industrialization and economic expansion. By 1872, Deutsche Bank had set up offices in Bremen, Hamburg, Munich, Frankfurt am Main, Leipzig and Dresden domestically, and in Shanghai and Yokohama in China and Japan. At that time, Imperial China was economically, politically and socially backward, and major European and American powers had possessions, or territories, in the country. A number of German businesses held industrial interests in China and Deutsche Bank naturally needed a presence in China to serve its clients. In 1873, London became the bank’s first foreign office in Europe.

In the early 1870s, a credit bubble in Germany led to a major financial crisis and the failures of many German banks. Deutsche Bank took advantage of the distressed sector by acquiring two domestic lenders: Berliner Bank-Verein and Deutsche Union-Bank.

Throughout the 1880s and 1890s, Germany underwent a massive construction of infrastructure in power plants, electric grids, municipal lighting and tramway systems, and railway network. Deutsche Bank was at the forefront in financing these massive projects. Internationally, Deutsche Bank also participated in similar projects in Turkey, China, South America and the United States where German engineering was demanded. Most notably, the bank provided financing for the construction of the Northern Pacific Railway in America.

In 1894, Deutsche Bank, along with several other German, Austrian and Swiss banks, launched the Banca Commerciale Italiana (BCI). BCI specialized in long-term commercial and industrial lending very much like Deutsche Bank itself.

Deutsche Bank's network expanded further when Bergisch Märkische Bank and Schlesischer Bankverein were acquired in 1914 and 1917 respectively. The year 1914 also marked the outbreak of the First World War when Austria-Hungary declared war on Serbia, following the assassination, by a Bosnian Serb, of Archduke Franz Ferdinand, heir to the Austro-Hungarian throne. Within weeks, major European powers were at war due to a complex web of defence agreements with each other. When the Great War finally ended in 1918, 20 million people had been killed and the lives of countless more ruined. The German, Austro-Hungarian, Russian and Ottoman Empires also collapsed at the end of the War.

As part of the peace Treaty of Versailles, Germany was required to pay a huge 132-billion marks in reparations to the Allied nations. When terms of reparations agreement were made public, an angry outcry erupted in Germany. Against the economic and hyper-inflationary problems following the First World War, the Wall Street Crash of 1929 and its resulting Great Depression, the German and Austrian economies collapsed. Just before the October 1929 crash however, Deutsche Bank merged with longtime rival Disconto-Gesellschaft to form the Deutsche Bank und Disconto-Gesellschaft (the name was reverted back to Deutsche Bank in 1937).

Meanwhile, Adolf Hitler took advantage of the socio-economic turmoil to promote his nationalistic and racial-superiority Nazism. In a dark chapter of the bank's history, Deutsche Bank began to outs its Jewish directors and employees in 1933.

Throughout the 1930s, Adolf Hitler's government promoted militarism and engaged in a major rearmament movement. Deutsche Bank collaborated with Hitler by financing the weapons and ammunition industries, as well as purchasing debt securities from the Nazi government. Germany in 1938 made a bloodless, unopposed invasion of Austria, known as the Anschluss. The following year, Deutsche Bank took over Austrian bank Österreichische Creditanstalt - Wiener Bankverein, changing its name to Creditanstalt Bankverein. In the same year, Nazi Germany invaded Poland and soon formed an alliance with Japan, which had invaded China in 1937. These events set off the Second World War. During the war, the Nazi propaganda machine, which had taken over the entire German media, brainwashed the German population into supporting the brutal aggression against Germany's neighbours, as well as the extermination of the Jews, the homosexuals, the mentally ill and the physically disabled population across Europe.

By the time the Allies defeated Germany, Japan and Italy in 1945, tens of millions of people had been killed. Much of Europe and Asia was in ruins and the worldwide economy devastated. Germany itself was divided into zones of occupation: British, French, American and Soviet. The capital city of Berlin, itself entirely in the Soviet-controlled zone, was also divided into the American, British, French and Soviet zones. The British, French and American zones of Germany then became the Federal Republic of Germany (West Germany) in 1949, while the Soviet zone became the Democratic Republic of Germany (East Germany), which formed part of the Soviet-led communist Eastern Bloc of nations. Berlin itself was divided by the infamous Berlin Wall into the Western enclave of West Berlin and the communist East Berlin.

Following the Second World War, Deutsche Bank lost its entire network in East Germany in 1945, closed its head office in Berlin and operated out of Hamburg. It also gave up all its operations outside of Germany. Between 1947 and 1948, the Allies governments, determined to break up Nazi Germany’s old guards and remnants, forced Deutsche Bank to split into 10 regional banks. After much negotiation with the occupying forces, these 10 regional banks were amalgamated into three larger institutions: Norddeutsche Bank AG, Rheinisch-Westfälische Bank AG and Süddeutsche Bank AG.

In 1957, these three regional banks were reformed into a new Deutsche Bank AG based in the emerging financial centre of Frankfurt am Main. Unlike the old Deutsche Bank that focused on large-scale industrial and commercial lending before the war, the new bank launched new personal banking products such as savings accounts and personal loans. The bank began to rebuild its international operations in the 1960s by opening offices in South America, the Far East and the Middle East. In 1968, Deutsche Bank joined forces with Amsterdam-Rotterdam Bank (later ABN AMRO), Midland Bank (acquired by HSBC in 1992), Société Générale de Banque (today’s BNP Paribas Fortis) to establish the European American Bank & Trust Co. in New York. In 1972, the four-bank consortium again co-operated in the founding of European Asian Bank (Eurasbank). European Asian Bank existed until 1986, when Deutsche Bank acquired its entire ownership from the other partner banks and changed its name to Deutsche Bank (Asia). As for European American Bank, the European banking consortium decided to sell it to ABN AMRO. Subsequently ABN AMRO sold European American Bank to Citigroup in 2001.

In 1979, Deutsche Bank reopened its office in New York, the first time since the Second World War that the bank had a direct presence in the U.S.

In 1986, the bank bought BankAmerica’s Italian subsidiary, Banca d’America e d’Italia, for USD $603-million. Deutsche Bank gained about 100 branches in Italy from the purchase.

The bank began to aggressively expand its international commercial and investment banking operations in the 1980s and in 1984, acquired a 4.9% minority stake in British investment bank and stockbroker Morgan Grenfell Group plc. In 1989, Deutsche Bank acquired the rest of Morgan Grenfell for USD $1.42-billion, valuing the entire broker at USD $1.49-billion. Morgan Grenfell was established in 1838 and was closely related to J.P. Morgan & Co. at one point. The purchase gave Deutsche Bank a major foothold in the crucial London capital market.

The year 1989 of course also marked the fall of the infamous Berlin Wall and the subsequent re-unification of the two Germanys. In the summer of 1989, political liberalization in Poland, Hungary and the Soviet Union led to the relaxation of the Hungarian-Austrian border, allowing for the first time in decades Hungarians direct access to the West. Thousands of East German tourists in Hungary took advantage of the rare opportunity and "escaped" to Austria. Massive rallies then erupted in East Germany demanding political freedom. On 1989-11-09, the old guards conceded defeat and opened the tightly controlled border at Berlin Wall that had separated East Berlin and West Berlin since 1961, essentially allowing East Germans free access to West Germany.

The collapse of the communist regimes all across the Eastern Bloc (Warsaw Pact) nations led to the re-unification of East and West Germanys in 1990.

Recent transaction(s):

• In March 1990, in preparation of the re-unification of West Germany and East Germany, the formerly state-controlled banking offices in communist East Germany were re-organized into a new, private-sector bank called Deutsche Kreditbank AG. In April of the same year, Frankfurt-based Deutsche Bank formed a joint-venture with Deutsche Kreditbank in which 122 braches of Deutsche Kreditbank in Germany (East) were transferred to the new joint-venture called Deutsche Bank-Kreditbank AG along with 8,500 employees. Deutsche Bank took a 49% stake in Deutsche Bank-Kreditbank for DEM 148.5-million. Deutsche Kreditbank owned 47% of the shares, with the remaining 4% being held by four institutions.
• In 1993, Deutsche Bank entered into the Spanish retail banking market when it acquired the Banco de Madrid for USD $365-million. Banco de Madrid had a network of 318 branches.
• Later in 1993, Deutsche Bank further expanded its Italian operations by acquiring a 58% stake in Banca Popolare di Lecco for DEM 470-million (USD $276-million). Deutsche Bank made the same offer for the remaining shares, valuing the whole deal at DEM 810-million (USD $476-million). The purchase expanded Deutsche Bank’s network in Italy to 260 branches.
• In 1999, Deutsche Bank purchased U.S. trust, corporate and investment servicing specialist Bankers Trust Corp. for USD $10.1-billion. The purchase propelled Deutsche Bank to become the largest bank in the world in terms of assets at the time, surpassing UBS and Citigroup.
• In 2000, Deutsche Bank bought the 84% stake of National Discount Brokers that it didn't yet own for USD $886-million.
• In 2001, the Big Three in Germany, Deutsche Bank, Dresdner Bank and Commerzbank merged their mortgage bank subsidiaries Eurohypo, Rheinhyp and Deutsche Hyp into the new EuroHypo AG.
• In 2001, Deutsche Bank bought Zurich Scudder Investments Inc. from Zurich Financial Services AG for USD $1.2-billion in cash plus USD $1.3-billion in asset swap. Zurich Scudder was the U.S. asset management unit of Zurich Financial and managed USD $278-billion of assets. Threadneedle Asset Management was excluded from the sale and remained as part of Zurich Financial. As part of the agreement, Zurich Financial also received 75.9% of Deutscher Herold and 100% of Bonnfinanz, DGV (Deutsche Gellschaft für Vermögensberatung), as well as Deutsche Bank's life insurance operations in Italy, Spain and Portugal from Deutsche Bank. In return, Deutsche Bank acquired ownership of Zurich Financial's asset management businesses in Germany and Italy.
• In 2003, Deutsche Bank acquired private bank Rued, Blass & Cie. AG from Zurich Financial for an undisclosed amount.
• In 2006, Deutsche Bank acquired the 60% stake in Russia's United Financial Group for a reported USD $400-million. Deutsche Bank had owned 40% of the Russian brokerage firm since 2003.
• In 2006, Deutsche Bank acquired a 9.9% stake in China’s Hua Xia Bank for about Eur 192-million.
• In 2007, Deutsche Bank bought Abbey Life Assurance Co. from Lloyds TSB's insurance and pension management subsidiary Scottish Widows for GBP 977-million (Eur 1.4-billion, USD $1.98-billion). Abbey Life managed GBP 12-billion of assets (USD $24.3-billion) and had over 1.2-million policies. The Abbey Life Assurance bought was unrelated to Abbey plc's life insurance businesses bought by Resolution plc from Abbey plc in 2007.
• In April 2008, Deutsche Bank bought 60% of Taiwan's Far Eastern Alliance Asset Management Co. Ltd. from its parent Far Eastern Group. Terms were not disclosed.
• In September 2008, Deutsche Bank raised Eur 2.2-billion by issuing 40 million new common shares.
• In October 2008, Deutsche Bank completed the capital increase at Hua Xia Bank, raising its stake from 9.9% to 13.7% for Eur 352-million (CNY 3.91-billion). Hua Xia Bank operated 303 branches in China.
• Also in 2008, Deutsche Bank agreed to buy 29.75% of Deutsche Postbank from Deutsche Post for Eur 2.79-billion (USD $3.95-billion). Deutsche Postbank served 14.5-million individuals through its 850 branches. As part of the deal, Deutsche Bank had the option to buy another 18% of Postbank within three years, as well as the first right of refusal to acquire the remaining 2.25% held by Deutsche Post now. (Deutsche Post held 50% plus one share of Postbank before the sale to Deutsche Bank.) This agreement was revised later (see below).
• In 2009, the Postbank deal was revised to include less cash but at an accelerated rate. Under the new agreement, Deutsche Bank issued Eur 1.1-billion (USD $1.45-billion) of new shares in exchange for an immediate 22.9% stake in Deutsche Postbank. The seller, Deutsche Post, ended up owning 8% of Deutsche Bank. Deutsche Bank also bought Eur 2.7-billion (USD $3.56-billion) of Deutsche Post bonds that would be converted into 27.4% of Deutsche Postbank shares after three years. Finally, Deutsche Bank would pay Eur 1.1-billion for options representing a 12.1% stake of Deutsche Postbank to be exercised between the 36 and 48 months after the closing of the transaction.
• In October 2009, Deutsche agreed to buy the Luxembourg-based wealth management business of Sal. Oppenheim Jr. & Cie. SCA. Group for Eur 1-billion (USD $1.48-billion). Sal. Oppenheim had EUR 137-billion of assets under management.
• In April 2010, Deutsche Bank bought certain parts of ABN AMRO's Dutch commerical banking operations for EUR 700-million. They Dutch state, ABN AMRO and Deutsche Bank had been in talks over the terms since August 2008.
• In May 2010, Deutsche Bank subscribed to CNY 5.75-billion (EUR 636-million) of new Hua Xia Bank shares, raising its stake to the maximum 19.99% allowed of a Chinese bank by foreign investors.
• In May 2014, Deutsche Bank announced that it would withdraw from both the London silver fix and London gold fix processes as part of its plan to exit most commodities trading. Without Deutsche Bank's participation, the London Market Fixing Ltd. announced that the last daily London silver fix will be published on 2014-08-14, ending a 117-year tradition.  HSBC and Bank of Nova Scotia are the other two silver fix members currently.
• In March 2015, Deutsche Bank partnered with private-equity firms Kohlberg Kravis Roberts (KKR) and Värde Partners to acquire GE Capital's Australian and New Zealand consumer finance business for AUD $8.2-billlion (USD $6.26-billion). The business had more than 3-million clients and offered personal loans, credit cards, as well as interest-free financing for products sold through retailers in Australia and New Zealand.
• In April 2015, Deutsche Bank announced that it would spin off its Postbank division, exiting the post office retail banking operations, but the plan was cancelled and Deutsche Postbank remained a wholly-owned subsidiary.
• In December 2015, Deutsche Bank agreed to sell its entire 19.99% stake in Beijing-based Hua Xia Bank to China's PICC Property & Casualty Insurance for between CNY 23.0-billion to 25.7-billion (EUR 3.24-billion to 3.62-billion, USD $3.54-billion to $3.96-billion). Hua Xia had about 90 branches in China
• In July 2019, following years of failed attempts to revive its sprawling but unprofitable global investment banking operations, Deutsche Bank announced that it was shuttering its global equity trading and sales units, and part of its fixed income operations. A total of 18,000 jobs will be cut with the most job losses happening in London and New York, but other financial hubs such as Tokyo, Hong Kong, Singapore and Sydney will be affected. Deutsche Bank would take a EUR 7.4-billion (USD $8.3-billion) charge due to the restructuring.

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Germany Bank Mergers & Acquisitions (Dresdner Bank)

Photo: Outside of Germany, investment bank and asset manager Dresdner Kleinwort was perhaps more well-known than its parent Dresdner Bank. Dresdner Kleinwort maintained dual headquarters in London and Frankfurt-am-Main. This was their London head office at 30 Gresham Street in 2007. As of 2009-09-01, the brand Dresdner Kleinwort has ceased to exist.

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Dresdner Bank was taken over by Commerzbank in 2009. All future updates related to Dresdner Bank will be listed under Commerzbank.

Dresdner Bank AG

Dresdner Bank was created in 1872 in Dresden by the conversion of private bank Michael Kaskel (founded in 1771). The bank’s three principal founders Carl Freiherr von Kaskel, Felix Freiherr von Kaskel and Eugen Gutmann were joined by five other private banks to form Dresdner Bank: Allgemeine Deutsche Creditanstalt, Berliner Handels-Gesellschaft, Deutsche Vereinsbank, Deutsche Effekten- und Wechselbank and Anglo-Deutsche Bank.

As Germany underwent rapid industrialization in the last quarter of the 19th century, Dresdner Bank benefited greatly from the prospering economy. Merely one year after its founding in 1872, Dresdner began to expand by acquiring other banks in Saxony. In 1881, a branch was opened in Berlin, whose business quickly exceeded that of Dresden. In 1884, the bank’s registered office was moved to Berlin.

Dresdner Bank acquired Hamburg-based Anglo-Deutsche Bank in 1892. Interestingly, Anglo-Deutsche had been one of the founding investors of Dresdner 20 years earlier. In 1894, Dresdner, along with rival Deutsche Bank and other Swiss and Austrian partners, created the Banca Commerciale Italiana, one of Italy’s first modern commercial banks. In 1895, Dresdner Bank established a branch in London, the financial centre of the world at the time.

During the turn from the 19th into the 20th century, Dresdner financed major electric, railway, manufacturing and petrochemical projects in Germany and around the world. In 1906, the bank joined forces with A. Schaaffhausen’scher Bankverein and National Bank für Deutschland to establish the Deutsch-Südamerikanische Bank (based in Berlin) and the Deutsche Orientbank, expanding operations in Latin America and the Far East.

When World War I broke out in 1914, the bank was forced to close it London branch. Needless to say, the War devastated normal lives and business for all involved. Dresdner Bank experienced years of lackluster growth in the 1920s. Under the peace Treaty of Versailles, Germany was required to pay 132-billion gold marks as reparations to the Allied nations. When terms of the reparations were made public, an outcry erupted in Germany. The early 1920s was a turbulent time for Germany as the infamous hyper-inflation practically made the German mark worthless. The hyper-inflation fuelled a consumption boom, as consumers and businesses alike would rather fully spend the paper money that they received daily, than to hold on to it overnight when it was worth even less the following day. In order to pay the reparations, Germany also borrowed heavily from mainly foreign banks and creditors.

In 1929, the Roaring Twenties came to a sudden halt when the U.S. stock and real estate boom turned into a bust in October, and foreign creditors withdrew their credit to Germany as loan losses mounted. The ensuring loss of confidence and funding source shook the German economy. In May 1931, Austrian bank Credit-Anstalt became insolvent after years of excessive lending and poor management, sending more fears to the German public. Panics led to a run on the German banks during the summer. On 1931-07-13, German banks restricted cash withdrawals to 20% of the requested amount, which only made matters worse. The Reich government finally declared 1931-07-14 and 1931-07-15 as national holidays to stem the run on the banks, and stepped in to bail out the banking sector. In the case of Dresdner Bank, the Reich government took up Reichsmark 300-million of preferred shares to re-capitalize the bank in August. As a result, the Reich directly and directly held 88% of Dresdner Bank.

In 1932, the Reich government merged the Darmstädter und Nationalbank into Dresdner Bank, creating a new entity with 218 branches. Five years later in 1937, Dresdner Bank was re-privatized by the Reich government. Then in 1938, Austria was annexed to the German Reich, and Dresdner Bank’s Austrian unit took over two other Austrian banks to form the Länderbank Wien.

In 1939, German history entered its darkest moment when Adolf Hitler’s Nazi army invaded Poland, setting off World War II. Once again Dresdner Bank’s international operations were terminated. Ironically though, as the Nazis steamrolled over the rest of Europe, the bank either took over or established new banks in occupied Poland, Latvia, Croatia, Greece and Belgium. In 1942, as Germany co-operated with Imperial Japan at the height of World War II, Dresdner participated in creating the Deutsche Bank für Ostasien (“German Bank for East Asia”) to optimize business between Germany and Japan. Not surprisingly, as Germany’s principal lender to industrial enterprises, Dresdner actively participated in financing Germany’s arms industry during World War II.

When the War finally ended in 1945, Germany was split into Western zone (controlled by the American, British and French governments) and the Soviet zone. Dresdner Bank lost its Berlin head office as well as all operations in the Soviet zone, which later became East Germany. As the Allies were determined to ensure all German banks be shrunk to a scale too small to ever finance a national war machine again, the Liquidation Commission in 1947 split up the remaining Dresdner Bank into 11 small area banks: Hamburger Kreditbank, Niederdeutsche Bankgesellschaft, Bremer Bank, Lübecker Bank für Handel und Industrie, Rhein-Ruhr Bank, Rhein-Main Bank, Allgemeine Bankgesellschaft, Süddeutsche Kreditanstalt, Bankanstalt für Wüettemberg und Hohenzollern, Industrie- und Handelsbank, and Bayerische Bank für Handel und Industrie.

However, the 11 area banks proved too small to operate efficiently. In 1952, the 11 area banks were consolidated into three regional banks: Hamburger Kreditbank for the North, Rhein-Ruhr Bank for the West and Rhein-Main Bank for the South. Then in 1957, Dresdner Bank was reborn when the three regional banks combined. The new Dresdner Bank was based in Frankfurt-am-Main, with major administrative offices also in Hamburg and Düsseldorf.

In 1958, Dresdner led a group of investment banks to underwrite shares of consumer goods maker Unilever and electronics firm Philips on the German stock exchanges, marking the first post-World War II issuance of foreign shares within Germany. Throughout the 1960s and 1970s, the bank actively returned to the international scene, opening offices in New York (1965), London (1967), Johannesburg (1968), Singapore (1972), Moscow (1973) and Hong Kong (1979).

In 1968, Dresdner Bank established the German-American Securities Corp., marking the first time a subsidiary of a European bank to be admitted to the American Stock Exchange. In 1971, Dresdner vastly expanded its mortgage business by acquiring a majority shareholding in five German mortgage banks.

The early 1980s was a difficult time for Dresdner and other banks around the world as soaring inflation and slumping economies were combined with a Third World Debt Crisis. Towards the latter half of the decade Dresdner Bank resumed its expansion, particularly in the investment banking, merchant banking and asset management markets.

In August of 1989, what began as Hungary’s allowing its citizens to travel to Austria freely led to demonstrators all over East Germany demanding the same freedom. When it became clear that the protests could no longer be controlled, the East German authorities announced that as of 1989-11-09, East Germans would be free to travel to the West, setting stage for the re-unification of the Germanys in 1990. The former Communist East German central bank’s retail operations were re-organized into the Deutsche Kreditbank. To bolster competition in East Germany, Deutsche Kreditbank formed joint-ventures with both Deutsche Bank and Dresdner Bank. Dresdner’s joint-venture with Deutsche Kreditbank in East Germany was called Dresdner Bank Kreditbank, in which Dresdner had a 49% stake. In 1990, Dresdner Bank returned to its birth place of Dresden for the first time since the end of World War II.

Kleinwort Benson Group plc

Kleinwort, Sons & Co.

Interestingly, both of Kleinwort Benson's predecessors can both be traced to 1786. In that year, Hinrich Kleinwort started a partnership with Otto Mueller in Holstein to finance trade with England. One of his descendants, Alexander Friedrich Kleinwort moved to Cuba in 1838 to join Havana trading concern run by Englishman James Drake. In 1855, Alexander Kleinwort relocated to London and became the dominant partner of the London operations. In 1863, the firm Drake, Kleinwort & Cohen moved to a new office at No. 20 Fenchurch Street. By 1884, Alexander Kleinwort and his sons had gained control of the firm, renaming it Kleinwort, Sons & Co. The company had also shifted its focus from trading to merchant banking and participated in the financing of Japan's first railway, linking Yokohama with Shimbashi. Kleinwort, Sons & Co. became London's largest merchant banks in 1900 in terms of balance sheet. In 1906, Kleinworts won the deal to underwrite the London sales of the floatation of Sears, Roebuck & Co.

However, Kleinworts suffered successive, significant setbacks during World War I, the 1931 German banking crisis, and again in World War II, due to its historic connection with, and exposure to Germany. In each case, however, Kleinwort, Sons & Co. was able to recover and remain a powerhouse in London finance.

Robert Benson, Lonsdale & Co.

In 1786, Robert Benson joined William Rathbone to establish cotton trading firm Rathbone & Benson in Liverpool. In 1852, Robert Benson Junior started his own merchant bank Robert Benson & Son in London. The new firm participated in financing some of America's earliest railways, and also was a pioneer in investment trusts. In 1947, Robert Benson & Co. merged with its client Lonsdale Investment Trust Co. to form Robert Benson, Lonsdale & Co.

In 1958, Robert Benson Lonsdale was part of a syndicate of merchant banks siding with British Aluminium to fight off a hostile takeover bid from Reynolds Metals. After a long and bitter battle, Reynolds Metals, which counted amongst others, S. G. Warburg as its bankers, eventually gained control of British Aluminium. The battle for British Aluminium turned merger and acquisition advisory into a high-profile, high-profit business for the first time.

In 1960, Kleinwort, Sons & Co. merged with Robert Benson, Lonsdale & Co. to form Kleinwort Benson Lonsdale (later simply Kleinwort Benson). Kleinwort Benson in 1984 became the lead-underwriter of the floatation of British Telecom, the first of a series of British crown corporations to be privatized. Later, the underwriter also participated in the privatizations of British Airways and British Gas. In 1986, "Big Bang" eliminated the restrictions on securities underwriters like Kleinwort and stockbrokers, and Kleinwort Benson promptly acquired stockbroker Grieveson Grant. In 1995, shortly after Kleinwort Benson was acquired by Dresdner Bank, the new Dresdner Kleinwort Benson underwrote the DM 20-billion initial public offering of Deutsche Telekom, which marked the first equity investment for many German households.

Recent transaction(s):

• In 1995, Dresdner Bank AG acquired British investment bank Kleinwort Benson Group plc for USD $1.64 billion. The investment bank division was re-named Dresdner Kleinwort Benson.
• In 1998, Dresdner Bank's mortgage bank subsidiaries consolidated when Dresdner's Deutsche Hypothekenbank Frankfurt merged with Hypothekenbank (based in Hamburg) and Norddeutsche Hypotheken- und Wechselbank (also based in Hamburg). The new entity was re-named Deutsche Hypothekenbank Frankfurt-Hamburg. Dresdner first acquired a majority holding in the five mortgage banks back in 1971. Of the five mortgage banks, Deutsche Hypotheken had taken over Sächsische Bodencreditanstalt back in 1972, and Pfälzische Hypothekenbank in 1990.
• In 2000, arch-rivals Deutsche Bank and Dresdner Bank entered into merger talks. But when Deutsche Bank proposed to sell off Dresdner Kleinwort Benson as part of the merger, Dresdner Bank broke off the discussions. Later in 2000, Dresdner Bank and rival Commerzbank also briefly discussed a merger without a conclusion.
• Late in 2000, Dresdner Bank's Dresdner Kleinwort Benson acquired U.S. investment bank Wasserstein Perella Group Inc. for USD $1.56-billion. Wasserstein Perella was merged into Dresdner Kleinwort Benson, which was renamed Dresdner Kleinwort Wasserstein.
• In 2001, German insurer Allianz SE bought Dresdner Bank AG for Eur 24.0-billion (USD $21.0-billion). Allianz's purchase of Dresdner Bank was modelled after the Citibank-Travelers combination in the U.S. in 1998. Allianz was hoping to combine its own insurance products with Dresdner's banking services into a financial giant that could cross-sell each other's products. However, like the Citibank-Travelers merger, the Allianz-Dresdner merger also turned out to be costly and disappointing for Allianz’s shareholders.
• In August 2008, following Eur 3.0-billion (USD $4.4-billion) of write-downs from Dresdner Kleinwort, Allianz decided to sell Dresdner Bank to Commerzbank for Eur 8.8-billion (USD $12.81-billion) in a cash-and-stock transaction. The purchase price consisted of Eur 1.6-billion of cash, Eur 6.5-billion in Commerzbank shares, and the cominvest division valued at Eur 700-million. In addition, Commerzbank promised to make a maximum Eur 975-million payment to Allianz to cover potential future losses from some sub-prime securities that Allianz was ultimately responsible for, bringing the potential total value of the deal to Eur 9.775-billion (USD $14.23-billion).
• In November 2008, Commerzbank’s agreement to buy Dresdner Bank was revised. Commerzbank had already acquired 60% of Dresdner in August for Eur 1.6-billion in cash, Eur 2.75-billion in stock and the cominvest division valued at Eur 700-million. Instead of issuing another Eur 3.75-billion of stock and insuring Eur 975-million of potential sub-prime losses, Commerzbank immediately acquired the remaining 40% of Dresdner from Allianz for Eur 1.65-billion in cash. The amendment reduced the value of the entire Dresdner Bank acquisition to Eur 6.7-billion (USD $8.93-billion).

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