Deutsche, Commerzbank favor merger over holding company structure: sources

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Deutsche Bank and Commerzbank favor a straightforward merger over more complex ways to structure a deal, three people close to the matter said.

In their base case scenario, a transaction would be organized as a share offer from Deutsche Bank for Commerzbank, they said. That structure is preferred to the creation of a new holding company, which is viewed as too difficult to execute."The holding structure is dead," one of the people said, referring to setting up a holding company that would buy Deutsche and Commerzbank in return for shares of the new bank.

Last month the two banks confirmed they were in talks about a merger. A preliminary decision on whether they want to go forward is expected within days. There has been a push since the financial crash to make banks easier to break up, lowering the risk that the problems of a troubled investment bank, for instance, could affect ordinary savers.

In Deutsche and Commerzbank's case, defining the relative value of the two banks for a holding structure would be more complicated than simply negotiating a price for a simple takeover, the sources said.

 

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