Talks between German banks Commerzbank and Dresdner Bank about a potential merger have intensified, fuelling speculation that the two will soon finally confirm concrete merger talks.
Teams from both Commerzbank and Allianz, the insurance group that owns Dresdner, have been locked in almost daily discussions on the valuation of each other’s assets.
A deal is not believed to be imminent and Allianz is also talking to other potential partners. Dresdner Kleinwort, Dresdner’s investment banking arm, which has been hit by heavy subprime write downs, could prove an obstacle to any deal.
The closer contact comes after the two have discussed fielding a joint bid for Deutsche Postbank, creating a three-way merger, a move now seen as unlikely in the near future.
It is believed that Commerzbank and Dresdner could still bid for Postbank, Germany’s biggest retail bank, at a later date. Although a major hurdle for any move is the high price its main shareholder Deutsche Post would seek from the sale of its 50 percent stake.
Deutsche Post was last week reported to also be talking to foreign banks about its Postbank stake, including Lloyds TSB, Spain’s Santander and Dutch bank ING.
Deutsche Post said last week that discussions with potential partners were moving forward quickly but no preliminary decision on selling the bank had been taken.
Meanwhile, Lloyds TSB is still believed to be interested in a possible deal in Germany, where it believes it has a lot of potential to shake up an inefficient market.