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BERLIN (AP) – German bank Deutsche Bank, the country's largest bank, and its national rival, Commerzbank, have decided to open negotiations on a possible merger, lenders said Sunday in an announcement following months of speculation about such a rapprochement.
Commerzbank said in a statement in one sentence that banks "today agreed to start discussions with an open result on a possible merger".
Deutsche Bank said its board of directors had decided to "review the strategic options" and added that there was no certainty about the emergence of a transaction . "In this context, we confirm that we are discussing with Commerzbank".
A merger would bring together two banks that had more than 133,000 full-time employees at the end of last year and had had problems in recent years. The merger talks were greeted with some skepticism as the two banks were restructuring their own businesses, raising the question of how to integrate a new partner.
However, there has been lingering speculation in recent months that both lenders, with the apparent encouragement of the German government, would explore a possible combination.
The German Finance Ministry said the country needed strong banks, but did not comment on reports that it was supportive and even in favor of a merger. The Ministry of Economy has recently referred to the importance of national and European "champions" capable of competing on the global economic scene, designating Deutsche Bank as existing.
Deutsche Bank has embarked on a major restructuring and cost reduction effort to return to stable profits and resolve longstanding legal issues. In 2018, it made its first profit over three years, but recorded a loss for the fourth quarter.
Commerzbank, which received government support during the financial crisis, also restructured. The German government still has a participation of about 15% in the company.
In a message to Deutsche Bank employees, Christian Sewing, CEO, said the bank should "evaluate the role we want to play in defining" the consolidation of the German and European banking sector.
"What is also important to me is that we only pursue options that have an economic meaning," he wrote.
On the odds of seeing an agreement emerge, he wrote: "Experience has shown that there could be many potential economic and technical factors that could hinder or prevent such a step."
The discussions "will take some time, because for us the rigor pbades before the speed," said Joerg Eigendorf, head of communication at Deutsche Bank.
Deutsche Bank has a market value of about 16 billion euros (18.1 billion dollars), while Commerzbank weighs about 9 billion euros.
The prospect of a merger was heavily criticized by Ver.di's workers' union services, which reported a potential risk for tens of thousands of jobs.
According to a union official, Jan Duscheck, a merger would create new risks and new problems without resolving the old ones – "without the merger being a real added value for the companies themselves, for the consumers, for the company. economy and even less for employees ".
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