Deutsche Bank, Commerzbank Prefer Simple Merger, Open to US Unit Restructure


Deutsche Bank AG (DB) and Commerzbank prefer a straightforward merger structure instead of a complex agreement, Reuters reported Friday, citing three people close to the matter.

The companies favor a base case scenario where a transaction would be structured as a share offer from Deutsche Bank for Commerzbank, according to the sources. The creation of a new holding company is considered too difficult to execute, Reuters reported.

In Deutsche and Commerzbank’s case, determining the relative value of the two banks for a holding structure would be more intricate than just negotiating a price for a simple takeover, the sources said. A decision has yet to be made on a potential deal structure and that here is no guarantee that a deal will materialize, according to the report.

In a separate report by Reuters later in the day, citing three sources familiar with the matter, Deutsche Bank reportedly said it was open to the idea of further restructuring its US investment bank after Commerzbank executives inquired on its plans during merger discussions.

Deutsche Bank presented several options during the talks, such as a further scaling back of its US equities business, including prime brokerage services for hedge funds and reductions at its corporate finance business, according to the sources.