Business World

Saturday 22 September 2018

Commerzbank hires advisers to repel bids

Commerzbank has been restructuring ever since an ill-timed acquisition of Dresdner Bank for €9.8bn in 2008. Photo: Getty Images
Commerzbank has been restructuring ever since an ill-timed acquisition of Dresdner Bank for €9.8bn in 2008. Photo: Getty Images

Alexander Huebner and Arno Schuetze

Commerzbank is working with two investment banks to prepare itself for a potential takeover bid from a European rival.

Germany's second-largest lender has hired Goldman Sachs and Rothschild to evaluate its options, including a possible defence scenario, several people close to the matter said.

Commerzbank, Goldman Sachs and Rothschild all declined to comment.

Commerzbank has been restructuring ever since an ill-timed acquisition of Dresdner Bank for €9.8bn in 2008. That move forced Commerzbank to take a government bailout, slash jobs, close hundreds of retail branches and rein in its investment banking.

But its strong corporate lending business - Commerzbank specialises in financing Germany's prized Mittelstand cohort of medium-sized companies - makes it an attractive target for European peers eyeing a stronger footprint in Europe's largest economy.

Italy's UniCredit recently told Berlin it is interested in eventually merging with Commerzbank, people familiar with the matter told Reuters last month.

The bank has also caught the eye of other European peers. But the German government, which still holds a 15.6pc stake, last month denied a report that it favoured a merger of Commerzbank with France's BNP Paribas.

Berlin has said it would be willing to eventually sell its stake but it needs to get at least €18 per share to avoid a loss on its investment. Shares in Commerzbank, which is valued at €14.4bn, were up 2.5pc at €11.71 earlier yesterday.

While a foreign bank may succeed in buying the lender, a consolidation within Germany is also on the cards. (Reuters)

Irish Independent

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