FRANKFURT: Deutsche Bank and Commerzbank confirmed on Sunday they were in talks about a merger, prompting labour union concerns about possible job losses and questions from analysts about the merits of a combination.
German officials fear that a recession or big fine, for example, could derail the bank's fragile recovery.Berlin wants a reliable national banking champion to support its export-led economy, known for cars and machine tools. Together, Deutsche and Commerzbank employ 140,000 people worldwide. A merger would put tens of thousands of jobs at risk, according to unions.Proponents of a merger include the German government and U.S. investor Cerberus, which is a shareholder in both banks. Opponents include some other shareholders in Deutsche Bank and labour unions.
With the talks now out in the open, and Berlin still pushing for a deal, the companies are under pressure to figure out the mechanics of a fusion and decide whether or not it is workable. That decision is seen within weeks.One of the biggest risks is how to fill what one German official has told Reuters will be a multi-billion-euro financial hole because a merger could trigger an adjustment to the valuation of some bank investments.
The two banks could also get bogged down with restructuring, such as integrating different technology systems, losing ground to rivals.German officials have held exploratory talks about merging Deutsche and UBS but there was little interest in Switzerland, people familiar with the matter have said.
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