Allianz takes over Germany's third biggest bank

Allianz AG insurance firm is to take over Germany's third largest bank, Dresdner Bank AG.

Directors have approved the German insurance giant's takeover to form a new European powerhouse, Allianz.

The deal is still subject to approval from each company's shareholders and competition authorities.

The deal values Dresdner Bank at 53.13 euros per share, and will be paid with cash and stock.

Allianz, which already owns 20% of Dresdner, will pay a premium for all outstanding shares.

Dresdner shareholders will receive one Allianz share plus 200 euros for every ten Dresdner shares. A supervisory board source valued the deal at 25 billion euros.

To pay for the offer, Allianz has approved a plan to buyback up to 3.5% of its own shares.