Deutsche Bank Deal Talks With Commerzbank Break Down

By Ben Dummett and Jenny Strasburg

Banking giant Deutsche Bank AG and its crosstown rival Commerzbank AG Thursday ended merger talks, leaving in tatters the German government's hope to shore up both banks and create a banking powerhouse.

The failure to unite the two ailing lenders is likely to unleash fresh attempts by other banks to scoop up one or both of the banks, a process that could spur the biggest reshuffling of European banking assets since the financial crisis.

"After careful analysis it became apparent that such a combination would not be in the interests of either bank's shareholders or other stakeholders," Commerzbank said.

After years of flirting with a tie-up, the banks for the first time announced last month they were in formal merger talks. They were both under pressure from investors and the German government to find a way to revive themselves after years of slumping performance and overhauls.

A deal offered the potential to drastically slash costs by cutting tens of thousands of jobs and lower funding costs for troubled Deutsche Bank through access to the direct government shareholding and added retail deposit base of Commerzbank.

In the end, Deutsche Bank and Commerzbank couldn't come to terms on how to overcome both the challenges of integrating the banks' technology, back-offices and other operations -- a process that would take years to complete -- and the dilution shareholders faced from any deal.

Patricia Kowsmann contributed to this article.

Write to Jenny Strasburg at jenny.strasburg@wsj.com and Ben Dummett at ben.dummett@wsj.com

(END) Dow Jones Newswires

April 25, 2019 05:02 ET (09:02 GMT)

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