Lloyds TSB considering bid for Germany’s Dresdner

The word on the street is that Lloyd’s TSB, one of the major British banks not hit hard by the mortgage crisis, may be considering a bid for Germany’s Dresdner Bank, now owned by the insurance company Allianz.

If this sale does in fact go through it will be a major, major event because it will usher in a much needed wave of consolidation in European banking on the heels of a spectacular credit crunch.

The German magazine Der Spiegel mentions this story on their site. The story reads:

Lloyds TSB is interested in Dresdner Bank

Now there are three serious prospects: The British financial group Lloyds TSB wants to buy Dresdner Bank from Allianz. Initial discussions are said to have already taken place.

According to SPIEGEL sources, Allianz has been in negotiations with the British financial institution Lloyds TSB for several weeks concerning a sale of Dresdner Bank. The British are even said to have offered a purchase offer, although a non-binding one. With Lloyds TSB, there are now three serious interested parties with Commerzbank and the Spanish bank Santander.

Allianz is ready to take billions in writedowns on its investment in its banking subsidiary should it be able to complete a sale. On its balance sheet, Dresdner Bank is valued at twelve billion euros. However, the likely sale price lies closer to eight billion euros.

(my translation)

The Original story in German reads:

Lloyds TSB interessiert sich für Dresdner Bank

Jetzt gibt es drei ernsthafte Interessenten: Der britische Finanzkonzern Lloyds TSB will der Allianz die Dresdner Bank abkaufen. Erste Gespräche sollen schon stattgefunden haben.

Die Allianz verhandelt nach SPIEGEL-Informationen seit mehreren Wochen mit dem britischen Finanzkonzern Lloyds TSB wegen eines Verkaufs der Dresdner Bank. Die Briten sollen sogar schon ein allerdings unverbindliches Kaufangebot abgegeben haben. Damit gibt es nun neben der Commerzbank und der spanischen Großbank Santander drei ernsthafte Interessenten.

Die Allianz ist bei einem Verkauf bereit, auf ihre Banktochter Abschreibungen in Milliardenhöhe vorzunehmen. In ihrer Bilanz steht die Dresdner Bank noch mit etwa zwölf Milliarden Euro, der tatsächlich erzielbare Verkaufswert liegt eher bei acht Milliarden Euro.

See also other posts under the label mergers and acquisitions to read about other merger rumours.


Lloyds TSB interessiert sich für Dresdner Bank, Spiegel Online, 21 Jun 2008

Update: 23 Jun 2008, 9:00 EDT

I have since written a blog entry on Santander, one major competitor in the bidding for Dresdner. Santander had their AGM at the weekend and their President, Emilio Botin, is very bullish despite the downturn in fortunes of the Spanish economy. See the storyhere.

In addition, since my story came out, the story is everywhere in the press. Here is a pick of a few stories from the Spanish and English Press. The Times story is interesting because it talks about a swap for Scottish Widows, as Allianz is an insurance company.

El británico Lloyd’s TSB ofrece 7.585 millones por el Dresdner Bank, El Pais

Lloyds TSB assesses Dresdner Bank purchase and Scottish Widows swap, The Times of London

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