German insurer Allianz SE (AZ) agreed over the weekend to sell Dresdner Bank AG to Commerzbank for 9.8 billion euros ($14.3 billion) in a deal that will create a large rival to Deutsche Bank (DB) - Get Report.

The new bank will become Germany's largest in terms of customers, but Deutsche Bank will remain No. 1 in terms of assets, the

AP

reported.

The deal will lead to significant layoffs. Some 9,000 workers out of the banks' combined total of 67,000 will lose their jobs, the

AP

added.

The transaction will take place in two steps and should be completed by the end of 2009, said Allianz, which expects to become the largest shareholder in the merged company with a target stake of nearly 30%.

Allianz shares closed Friday down 11 cents at $16.68. Shares of Deutsche Bank finished Friday down $1.13 at $84.87. U.S. stock markets were closed Monday in observance of Labor Day.

This article was written by a staff member of TheStreet.com.