German insurer Allianz has offloaded its troublesome subsidiary Dresdner Bank, but will take a 30% stake in new owner Commerzbank aiming to improve insurance sales through the bank network.

Commerzbank has agreed to acquire Dresdner for €9.8 billion ($16.8 billion).

Allianz will become the largest shareholder of Commerzbank, which has identified potential synergies of up to €5 billion ($8.6 billion).

The cash and equity tie-up includes a payment by Commerzbank of up to €975 million ($1.67 billion) into a trust, to cover certain high-risk Dresdner assets, and the transfer of asset management entity Cominvest to Allianz ownership.

The transaction will take place in two stages and is expected to close before the end of next year, subject to regulatory approval.