Deutsche Bank and Commerzbank abandon merger talks

Deutsche Bank and Commerzbank abandon merger talks

Deutsche Bank and Commerzbank abandon merger talks Izvor: REUTERS/Wolfgang Rattay

Merger talks between Germany's two biggest banks have collapsed, after Deutsche Bank and Commerzbank announced on Thursday that they would abandon merger discussions that started six weeks ago, saying that execution risks, restructuring costs, and the need to raise cash from investors to finance the deal would outweigh the benefits.

A merger would have satisfied politicians who want a national champion to provide financing for German companies. The German government bailed out Commerzbank in 2009 and still owns a stake of 15 percent.

A deal would have created a bank with over $2 trillion in assets, firepower that could have been used to better compete with rivals in Europe and the United States.

But labor unions were opposed, fearing a merger could result in the loss of 30,000 jobs. EU regulators may also have preferred a cross-border merger that would strengthen the region's financial system.

Investors worried that a merger of the struggling lenders would do little to resolve questions over their strategy and profitability while creating a bank that was too big to fail.

"After careful analysis it became apparent that such a combination would not be in the interests of either bank's shareholders or other stakeholders," Commerzbank said in a statement.

Shares in Deutsche Bank were trading nearly 3 percent higher in Frankfurt after the talks were abandoned, while Commerzbank stock dipped 2 percent.

The door could now open for another European bank to buy Commerzbank.

Italy's UniCredit and ING of the Netherlands are both reportedly interested in pursuing a takeover, although it's not clear whether the German government would approve of such a deal.

For Deutsche Bank, the end of talks with Commerzbank is likely to spark new questions about the future of its investment bank, which delivers volatile returns and has lost ground to Wall Street rivals. The Financial Times reported earlier this week that Deutsche Bank is in "serious" talks with Swiss bank UBS about a merger of their asset management divisions.

The newspaper said that talks have been underway for a couple of months. One scenario reportedly under discussion would see UBS fold its asset management division into that of Deutsche Bank in exchange for shares in the German group. Doing so would help them compete with industry heavyweights such as BlackRock and Vanguard.

Follow N1 via mobile apps for Android | iPhone/iPad | Windows| and social media on Twitter | Facebook.

POVEZANE VIJESTI

Comments (0)

Comment sent successfully.

Comment sending failed.

Invalid CAPTCHA

* All fields are required

MOST POPULAR

NAJČITANIJE

READ MORE

NEWS

NEWS

Democracies face security risks due to openness, says defence minister 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Murder probe after 39 bodies found in truck container in southeast England 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

US Senate votes for ratification of North Macedonia NATO membership 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Lease of Grand Chamber to EPP sparks dispute in Croatian Parliament 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Union to stage one-day strike at tertiary education institutions on Thursday 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Regulator okays Pivac's bid to take over Kras for HRK 430 per share 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Bosnian war survivors: Awarding Handke means rewarding fascism 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Striking teachers protest outside gov't offices 23.10.2019.

23.10.2019.  |  NEWS

PROČITAJTE JOŠ

NEWS

NEWS

Democracies face security risks due to openness, says defence minister 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Murder probe after 39 bodies found in truck container in southeast England 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

US Senate votes for ratification of North Macedonia NATO membership 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Lease of Grand Chamber to EPP sparks dispute in Croatian Parliament 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Union to stage one-day strike at tertiary education institutions on Thursday 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Regulator okays Pivac's bid to take over Kras for HRK 430 per share 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Bosnian war survivors: Awarding Handke means rewarding fascism 23.10.2019.

23.10.2019.  |  NEWS

NEWS

NEWS

Striking teachers protest outside gov't offices 23.10.2019.

23.10.2019.  |  NEWS

loader