The European Commission (EC) has given the go-ahead for the take over of Dresdner Bank by Allianz, the insurance group, in Germany.
The EC's investigations focused on the creation of a strong 'bancassurance' group and the impact of the planned takeover on the relationship between the new Allianz/Dresdner group and the Münchener Rück/Ergo group, a major competitor.
According to a statement by the EC, Allianz and Dresdner, both actively involved in asset management, will merge to create Germany's largest 'bancassurance' group.
Apart from addressing the possible consequences of the merger, the EC also looked at the new group's influence on the new growth market for personal pension schemes. It concluded there was no risk of a dominant position being created or strengthened.
However, in the course of its review the EC noted a large number of structural and economic links between the new Allianz/Dresdner group and the Münchener Rück/Ergo group, a major competitor, which would be considerably strengthened by the merger.
In view of the strong position on the market of the Münchener Rück/Ergo group, which, together with the Bayerischen Hypo und Vereinsbank AG (HVB), has also developed into a major 'bancassurance' group, the EC had “serious misgivings” on this score.
In order to remove the EC’s concerns, Allianz and Dresdner gave a legally binding assurance that they would reduce their joint holdings in Münchener Rück to 20.5% by the end of 2003 and would not in the meantime exercise more than 20.5% of their voting rights at Münchener Rück's annual general meetings. Presently, Allianz and Dresdner hold 24,9 % and 7.4%, respectively, in Münchener Rück.
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