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German bank talks continue
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July 10, 2000: 7:15 a.m. ET
Dresdner and Commerzbank mull three-way deal with Allianz
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LONDON (CNNfn) - Commerzbank AG's board meets Monday to discuss the German bank's continuing merger negotiations with rival Dresdner Bank AG, including the prospect of a three-way tie with insurer Allianz AG.
The companies held the latest round of talks over the weekend, Commerzbank spokesman Dennis Philips told CNNfn.com, saying a deal involving Allianz, Germany's largest insurer, was one of the options under discussion. Such a deal would see the banks create a holding company and allow Allianz, which has a 21 percent interest in Dresdner, to buy stakes in various parts of the business, likely to include the asset management and consumer banking divisions. 
A source close to the talks said the banks were "playing with all sorts of scenarios," in discussing merger possibilities.
A spokesman for Allianz declined to comment on the company's potential involvement.
The banks don't expect the talks to reach any conclusion in the immediate future, said Commerzbank's Philips, who added that a definitive decision on whether to proceed with a merger was likely "by the end of the month".
The proposed deal has echoes of Allianz's role in the ill-fated merger agreement between Dresdner and Deutsche Bank AG earlier this year. Prior to the breakdown of that plan, Allianz was set to buy a chunk of the combined banks' fund management business and a significant holding in their retail banking arm.
Executives take cautious approach
Industry sources told CNNfn.com the insurance company intends to continue this strategy, despite the initial setback. A Dresdner/Commerzbank tie could help Allianz cut its bulky shareholding in Dresdner, part of a huge overall portfolio of investments in German companies.
The embarrassing collapse of the Deutsche/Dresdner tie-up, after a merger had been hastily sketched out, has made executives sensitive to the need to hammer out the crucial issues before hailing a done deal.
Dresdner and Commerzbank spokesmen stressed at the weekend that the three-way tie was only one of the options the companies were considering. A combination of Dresdner and Commerzbank would have a market value of some $40 billion, ranking second among German banks by capitalization, behind Deutsche Bank with $50 billion.
Allianz (FALV) stock rose 1.5 percent to  372.5 Monday, while Commerzbank (FCBK) gained 1 percent to 38.95 and Dresdner (FDRB) shares rose 2.2 percent to 43.10. 
-- from staff and wire reports
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