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Dresdner-Hypo to merge?
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October 18, 1999: 4:04 a.m. ET
Report: Germany's No. 2 and No. 3 banks could merge by early next year
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LONDON (CNNfn) - Dresdner Bank and HypoVereinsbank are closing in on a merger with a deal likely early next year, according to a newspaper report Monday.
A deal is considered likely after Germany's No. 2 private-sector bank, Dresdner, and its larger rival Deutsche Bank, broke off talks earlier this month over a possible merger of their retail operations.
A link-up between Dresdner and country's No. 3 bank, HypoVereinsbank, is now the more likely scenario, especially as giant insurer Allianz (FALV) is a key shareholder in both institutions, according to the Financial Times, which cited unnamed banking sources.
The two banks are believed to be working toward announcing a deal in January or February. The timetable is in part dictated by the completion of the 1997 merger, which created HypoVereinsbank, scheduled for early next year, the FT reported, citing sources close to Munich-based bank.
HypoVereinsbank issued a statement Monday confirming that Dresdner was "one of several possible merger partners."
The newspaper reported that Allianz is thought to favor the Dresdner-HypoVereinsbank merger to protect its own power base. The German insurer owns 22 percent of Dresdner and 18 percent of HypoVereinsbank.
The merger is by no means clear-cut, however. Any proposed marriage could yet be scuttled by a hostile bid for Dresdner by Deutsche, according to the report.
HypoVereinsbank (FHTM) stock rose more than 2 percent to 57 euros Monday in Frankfurt, bucking a falling market. Dresdner (FDRB) stock gained a similar amount to 43.90 euros.
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