GERMANY - The proposed merger between Allianz, Germany’s largest insurance company and Dresdner Bank, could create an investment management powerhouse with almost e1trn in assets under management, according to sources close to the deal.

The German financial giants today confirmed they were in strategic talks to create a leading financial service provider for insurance, investment and banking products, noting that the talks were at an advanced stage.

According to reports, the bid of around e24bn made by Allianz for Dresdner would herald the creation of a bancassurance giant to be based in Munich, but with banking remaining in Frankfurt and investment banking continuing through Dresdner Kleinwort Wasserstein in London.

In terms of institutional investment banking, Allianz would bring over e670bn to the table through Allianz PIMCO Asset Management (APAM).
However, the bulk of Allianz’s third party money is outside the domestic market, coming principally from the acquisition of US bond manager Pimco with Oppenheimer Capital and the further buy-out of US player Nicholas Applegate.
A source close to the deal, commented: “The numbers for this proposal are very big, but it is true that a lot of the Allianz figures are internal insurance assets, although they do have third party funds through KAGs in Germany.

The acquisition of Dresdner could inject a further e250bn in third party money to a joint investment management group, the source adds.

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