German Finance Minister Gives Deutsche Bank Merger Talks a Nudge
Germany Needs Strong German Banks, Finance Minster Scholz Says
(Bloomberg) -- German Finance Minster Olaf Scholz revived his call for a national banking champion, giving the potential merger between Deutsche Bank AG and Commerzbank AG a fresh push as talks enter a critical phase.
While Germany would be happy to host “lots of” lenders from all over the world, the country and its export-led economy need “strong banks” that can support German businesses abroad, Scholz said late Monday in Munich, reinforcing the government’s key argument for a merger.
The Finance Ministry played a key role behind the scenes in pushing Germany’s largest listed lenders into talks. Scholz and his deputy Joerg Kukies, a former Goldman Sachs banker, are seeking to shore up Deutsche Bank before a potential downturn on the grounds that the country needs a national champion to support German businesses at home and overseas.
Discussions over the combination, which has sparked opposition from labor unions and politicians over job cuts and financial risks, are reaching a decisive point. Deutsche Bank Chairman Paul Achleitner has said a decision on whether to proceed with a deal will be made by April 26.
Unpopular Stance
Since the banks announced official merger talks in mid-March, the government has gone silent, with German Chancellor Angela Merkel distancing herself from the deal, saying it’s a private business matter.
A survey published last week in widely read Bild newspaper showed 43 percent against a merger and only 17 percent in favor. Scholz’s popularity dropped by 10 percentage points in a poll published Monday by Spiegel as he was widely criticized for his banking stance.
Meanwhile, the two German lenders are lining up more Wall Street advisers. Deutsche Bank hired Morgan Stanley to support it in the merger talks, according to people familiar with the matter, adding to a plethora of U.S. firms advising the two German lenders and underscoring American dominance in investment banking.
“Just being a host country -- as some European countries are -- is not the best thing to strive for,” Scholz said, indicating that he would like to see a German bank leading potential cross-border consolidation in Europe.
To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net;Tim Loh in Munich at tloh16@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, ;Ben Sills at bsills@bloomberg.net, Chris Reiter, Andrew Blackman
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