Commerzbank’s purchase of German rival Dresdner Bank AG will cost thousands of jobs, but analysts said Monday it will benefit insurer Allianz SE, which agreed to sell Dresdner over the weekend in a Euro 9.8 billion (US$14.44 billion) deal.

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Shareholders appeared to agree, sending the Munich-based insurer’s shares slightly higher in Frankfurt trading on Monday to Euro 114.42 (US$168.60), or up 0.28 percent.

Commerzbank shares suffered because many analysts were concerned about the boldness of such a major purchase in a German economic environment where growth has contracted and business and consumer confidence are at multiyear lows.

Shares of Commerzbank, Germany’s second-biggest bank, slid more than 11 percent to Euro 17.71 (US$25.89).

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The deal comes with a heavy toll in terms of job cuts: 9,000 workers out of the combined banks’ ranks of 67,000 workers will go, including back office, production and investment bankers. Of those cuts, 6,500 will take place in Germany with the other 2,500 abroad.

But by holding on to some 30 percent of Dresdner Bank, Allianz will be able to continue selling its insurance products through the branches of the new bank, which will be Germany’s biggest in terms of branches and customers, overtaking Deutsche Bank AG.

Commerzbank Chief Executive Martin Blessing said it was also a chance for the German banking sector to become more competitive internationally.

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Allianz CEO Michael Diekmann CEO said that a "merger of banks, especially clearing banks in Germany, is needed to – in times of crisis – have the necessary stability and strength to play a part in the European markets.“

That was a nod to the uncertainty swirling around the European banking sector which has seen wide exposure to the U.S. subprime crisis and led to major losses in earnings and confidence.

But Allianz also benefits from the deal because it will get Cominvest, Commerzbank’s asset management unit, which is worth Euro 700 million (US$1 billion).

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"All in all, we think that an almost 30 percent stake in the new banking entity is not much less risky compared to the 100 percent stake in Dresdner Bank in terms of the business mix,“ said Andreas Weese, an analyst with UniCredit in Munich. "However, advantages of the deal are the larger platform for the distribution of insurance products, the expansion of the asset management business via comdirect, and the participation in expected synergies.“

The new bank will have 11 million private customers in Germany and a network of 1,200 branches peppered across Europe’s biggest economy.

It will also have more than 100,000 corporate and institutional clients and expand its wealth-management operations for well-heeled private clients, too.

What it does not yet have is a name, Blessing said.

At a news conference Monday, he said both Dresdner and Commerzbank were recognized and familiar brands in the country. The logos of both banks dominate the skyline of Frankfurt.

Blessing said he was torn, given that he started out at Dresdner Bank, but said it made little sense to keep both names.

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On the Net:

www.allianz.com

www.commerzbank.com

www.dresdnerbank.com