Two months after the collapse of its planned merger with Deutsche Bank, Germany's Dresdner Bank has started talks about possible co-operation with the smaller Commerzbank. In a joint statement yesterday, the banks said they would proceed carefully in assessing the feasibility of a link-up and made no mention of a full merger.
"The boards of Commerzbank and Dresdner Bank confirm that they are in discussions about a range of possible business combinations. But the discussions are at a very early stage," the statement said.
The banks are clearly anxious to avoid repeating the mistake of Dresdner and Deutsche Bank, who announced that they were merging before they agreed the details and saw the deal collapse within weeks.
A merger between Dresdner and Commerzbank would create Germany's second biggest bank with a market value of €46 billion, just behind Deutsche Bank with €53 billion.
"Given the size of the two institutions and the scale of the subject, a careful assessment is needed to determine whether a viable concept can be developed," yesterday's statement said.
The first move towards a linkup is understood to have been made by Commerzbank's chief executive, Mr Martin Kohlhaussen, in an attempt to forestall a hostile takeover by a larger European bank. But his strategy appeared to backfire yesterday when Cobra, a holding company that recently became Commerzbank's biggest shareholder, threatened to block a merger with Dresdner.
Cobra, a German subsidiary of the Dutch holdings company Rebon BV, acquired 17 per cent of Commerzbank in April but Cobra's chief executive, Mr Hansgeorg Hofman, complains that he has not been involved in the talks with Dresdner. Cobra wants Commerzbank to look outside Germany for a partner and fears that merging with Dresdner would not sufficiently increase the bank's market share.
Most banking analysts believe that Commerzbank is too small to survive in Europe's consolidating banking market but few are convinced that a link-up with Dresdner would be strong enough to compete with Deutsche Bank.
