The Chief Executive of Deutsche Bank, Christian Sewing has got forced to explore the option of getting into a multi-billion-euro merger with rival Commerzbank. This has come through after a continuous range of low-interest rates along with pressure from the investors due to the poor performance from Deutsche Bank. The internal discussions of Deutsche Bank suggested that they would always prefer to look into the problems and try to get back on track before they can look to avail other options. He further said that the executives were worried that certain interested parties were purposefully building pressure to force the management to take concrete actions right now.
The US private equity group, Cerberus, the private equity group from the US happens to be one of the biggest investors in Deutsche Bank as well as in Commerzbank. They are quite active in their push for a tie-up. The finance ministry of Germany would welcome this as one way to create a champion of banking in their nation. The Chairman of Deutsche Bank, Paul Achleitner happens to be a proposer for getting their bank merged with the German bank, which would help create the second-largest bank of this Eurozone, having nearly 1.9tn Euro in assets. During the second part of February, the executive board of Deutsche Bank had discussed the situation and went on to give a formal mandate to Mr. Sewing, for exploring a possible merger with Commerzbank.
As of now, the talks that are going on between Commerzbank and Deutsche Bank have been quite superficial in nature. People have even said that the strict securities laws in Germany would force the banks to disclose in a formal manner, concrete discussions through a regulatory statement in case they leaked into the public domain.