Media reports have suggested that the German government, which owns 15 percent of Commerzbank, is backing the deal – even though it could cause a multi-billion euro financial hole.
Shares of Deutsche Bank and Commerzbank surged on Monday after the German lenders confirmed they were in talks about a potential merger.
div > div.group > p:first-child"> Commerzbank rose to the top of the pan-European STOXX 600, with shares gaining almost 7 percent, while Deutsche Bank shares were up nearly 4 percent. Talks are taking place following months of speculation, after Deutsche Bank CEO Christian Sewing reportedly withdrew his opposition to a deal. Media reports have suggested that the German government, which owns 15 percent of Commerzbank, is backing the deal – even though it could cause a multi-billion euro financial hole – because it would force the re-valuation of the lenders' assets.
Those financial pitfalls could also be passed on to Germany's workforce. German Chancellor Angela Merkel's chief of staff said Monday that the government was looking into potential job losses if a merger went ahead. According to German union Verdi, 30,000 jobs could be at risk, Reuters reported. Despite confirming the talks were going ahead, a deal between the two banks is not guaranteed. In a statement on Monday, Jorg Eigendorf, group spokesman for Deutsche Bank, told CNBC Monday:"It is important to us that… Deutsche Bank only engages in a transaction if it makes economic sense. Therefore, it needs a plan, it needs a detailed plan on the integration – we are now evaluating this with Commerzbank.
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