Investor Cerberus reported in favour of Deutsche Bank, Commerzbank merger

Banners of Deutsche Bank and Commerzbank are pictured in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany September 30, 2016. — Reuters pic
Banners of Deutsche Bank and Commerzbank are pictured in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany September 30, 2016. — Reuters pic

FRANKFURT, Feb 27 — US investor Cerberus, which is a major shareholder in both Deutsche Bank and Commerzbank, favours a merger between the two, a German newspaper reported yesterday.

Handelsblatt, citing unidentified people familiar with the matter, said Cerberus, which owns 3 per cent of Deutsche Bank and 5 per cent of Commerzbank, had initially been against a merger but had changed its mind.

Speculation of a merger between Germany's largest listed banks has heightened under the tenure of Finance Minister Olaf Scholz, who has spoken in favour of strong banks.

Commerzbank and Deutsche Bank declined to comment. Cerberus did not immediately respond to requests for comment.

The US buyout fund is among the largest shareholders in both Commerzbank and Deutsche Bank after buying stakes in 2017, since when the shares of both banks have since fallen sharply.

Cerberus is now backing a merger because it does not believe that Deutsche Bank can overhaul its operations on its own, Handelsblatt reported.

The investor is of the opinion that a merger would allow the two banks to invest in technology together and save costs in other areas, the report said.

Scholz's team has met frequently with executives of Deutsche, Commerzbank and major shareholders, including Cerberus. The government still owns more than 15 per cent in Commerzbank after a bailout.

A merger between the two banks has appeared more likely since last month when two people with the knowledge of the matter said that time was running out for Deutsche Bank to turn itself around on its own.

Both banks are in the process of restructuring themselves, and executives at both lenders say privately that they would prefer to remain independent to carry out those plans. — Reuters

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