The Work

September 2, 2008 7:03 PM

S&C, Shearman Leading on $14 Billion German Banking Deal

Posted by Brian Baxter

One of the world's largest international insurance and finance companies, Munich-based Allianz, announced on Sunday that it would sell its Dresdner Bank unit to Frankfurt-based Commerzbank for $14.4 billion in a two-part stock and cash transaction.

New York firms Sullivan & Cromwell and Shearman & Sterling are representing the two German giants on the deal, which will keep Frankfurt-based Dresdner Bank in German hands.

Shearman co-managing partner Georg Thoma, who also heads the firm's German operations, led a 19-lawyer team from the firm advising Allianz.

M&A partners Roger Kiem, Thomas König, Hans Diekmann, and Hans Jürgen Meyer-Lindemann, finance partner Ian Harvey-Samuel, M&A associates Andreas Merkner, Jan Schapmann, Michael Schmidt-Versteyl, Patrick Heid, Andreas Wieland, Ulrich Becker, Christine Koch, Jens Riedel, Stefan Falge, capital markets associates Katja Kaulamo and Stefan Otten, and antitrust associates Mathias Stöcker, Jan Hendrik Wiethoff, and Fabian Kaiser also advised on the deal.

"Allianz has been a longtime client of the firm," says Dusseldorf-based Meyer-Lindemann, noting that Shearman also represented the company in its initial July 2001 acquisition of Dresdner for nearly $20 billion.

The nearly $6 billion markdown is in part a result of consolidation in the German banking industry due to the subprime crisis. The current deal is structured in two stages, which allows Commerzbank to cut costs at Dresdner while Allianz retains a 30 percent stake in the struggling bank.

S&C M&A partner Wolfgang Feuring, the managing partner of the firm's Frankfurt office, is leading the legal team advising Commerzbank, Germany's second-largest bank, on the acquisition. The firm declined to comment on the deal or to provide a listing of additional attorney names.

While the deal will significantly increase the size of Commerzbank's customer base--making it the largest in Germany--the company still lags behind German banking kingpin Deutsche Bank in terms of overall assets.

Beijing-based China Development Bank reportedly offered more money to Allianz for Dresdner, but political concerns apparently helped swing the deal in Commerzbank's favor.

The transaction is expected to close by the end of 2009 pending regulatory approvals.

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