Commerzbank and Dresdner to merge

Commerzbank has bought rival German bank Dresdner from Allianz for €9.8 billion and has revealed 9,000 jobs will be axed as part of the deal.

The merger of Germany's second and third largest banks will have 11 million customers, creating a direct rival to Deutsche Bank.

The merged banks will have around 67,000 staff but there will be 9,000 redundancies as a result.

Of these, 2,500 will be outside of Germany, the banks said. Analysts expect London will bear the brunt of these cuts.

"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."

Commerzbank will exclusively offer Allianz insurance products as part of the transaction, with its current Generali deal expiring in 2010.

The transaction will occur in two steps and is expected to be completed by the end of 2009 at the latest, the banks said.

In the first step, Commerzbank will acquire at least 60.2 per cent of Dresdner shares by the start of 2009.

In step two, Commerzbank will acquire the remaining shares in exchange for Allianz taking a 30 per cent stake in the merged bank.