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Allianz and Munich Re are planning to reduce mutual cross-shareholdings worth more than $7 billion, while selling off some holdings in jointly held companies in order to free up cash for an expansion in fund management and insurance.

The moves will allow the insurers to take advantage of the German government’s plan to do away next year with a capital gains levy on shareholding sales. The companies plan to reduce their cross-holdings by between 20 and 25 percent by the end of 2003.