FRANKFURT (dpa-AFX) - Deutsche Bank AG (DB) is facing resistance from top Qatari shareholders to its merger plans with Commerzbank AG, Bloomberg reported citing four people familiar with the matter.
The investors are concerned that a deal would dilute their holdings if Deutsche Bank is forced to raise equity in a share sale to help fund the deal. The Persian Gulf nation is also seeking to negotiate other concessions before it backs the deal, the report said.
Labor representatives on Deutsche Bank's supervisory board reportedly said a merger would fail to strengthen the bank, while prompting massive job cuts. German newspaper editorials have also blasted the finance ministry's role in orchestrating a deal between two weakened lenders.
Qatar is also keen on more bilateral deals with Germany in other industries as a condition of backing the merger, one of the report said.
Deutsche Bank is in talks with the European Central Bank about the potential tie-up. The question of whether Commerzbank's low valuation could be used to generate regulatory capital is a particularly important topic. Regulators remain skeptical of the deal and want to see a viable and profitable business model before they approve of it, the report said.
On 17th March 2019, Germany's two biggest lenders, Deutsche Bank and Commerzbank confirmed they were in discussions to potential merge.
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