Shares in Germany's Allianz rose on Wednesday after a report in a German stock market newsletter that Deutsche Bank was in talks to buy the retail operations of the insurer's Dresdner Bank unit. The report sent shares in Allianz, Europe's biggest insurer, up more than 2 percent to a five-year high above 180 euros.
Sources familiar with the matter said later, however, that the insurer was not in such talks. Allianz declined to comment. Deutsche Bank, whose shares traded 1.3 percent higher, also declined to comment. Allianz shares were off a session high of 180.29 euros but were still up 2.1 percent at 178.75 euros by 1138 GMT.
The Platow Brief newsletter said Deutsche wanted to buy Dresdner's retail banking operations and that Allianz could sell Dresdner's investment banking business to either Morgan Stanley or J.P. Morgan Chase.
Earlier this month, sources familiar with the situation had told Reuters that Allianz, led by Chief Executive Michael Diekmann, was considering merging with a bank and had already examined various scenarios. A tie-up with a bank similar in size to the insurer could strengthen Allianz's presence abroad, the sources said, adding that there have been no talks with potential partners.
One of the sources said that finding an equal partner to Allianz's own 73 billion euro ($97.5 billion) market value would give the insurer critical mass in the rapidly consolidating financial services sector. Allianz is weighing its options amid a frenzy of activity as big European banks search for partners.
Allianz became one of the few insurers to own a bank when it bought Dresdner Bank in 2001, weathering a hail of criticism after the lender racked up almost 3 billion euros in losses. More recently, however, Dresdner has started to make modest profits and investor criticism has abated. However, few analysts think another bank deal likely.