Reuters has reported market rumours on the possible merger between Commerzbank and Citigroup. Commerzbank, which has been constantly pointed as a possible takeover target, were up 2.2%, its seven years high on talk Citigroup was likely to bid about € 45 per share. Both banks declined to comment on the market rumours.
Latest Citigroup representative’s comments on the acquisition strategy in Europe is inconsistent, with Sue Harnett, Citigroup's head of German operations, stating in late March that Citigroup was looking for acquisitions possibilities in Germany and could take over a big bank. At the same time, Citigroup Chief Executive Charles Prince was cited in German newspaper, in March, that the bank was not interested in buying a large bank in Western Europe. Additionally, Klaus-Peter Mueler, Commerzbank CEO, in an interview with Reuters in February, stated that he would examine any takeover offer, though he added there had been no serious talks.
Our view: The rumoured merger would have consequences for Polish banking market, as Bank Handlowy (75% controlled by Citigroup) and BRE Bank (72.5% controlled by Commerzbank) are among top ten biggest banks in Poland. The merged bank would become a third largest bank in Poland after merged Bank Pekao and PKO BP. Despite the rumours, both shares traded down yesterday.