Shares of Deutsche Bank and Commerzbank surged Monday after reports that the two have agreed to hold merger talks.
Several media reports over the weekend suggested Deutsche Bank CEO Christian Sewing had dropped his opposition to the deal. Sewing was reportedly forced to reconsider his stance following investor pressure over the bank’s declining performance.
The German government, which still owns 15 percent of Commerzbank, is understood to be backing a tie-up between the country’s two largest lenders. Reuters reported that Berlin is pushing for a deal, even though it could cause a multi-billion euro financial hole, because it would force the re-valuation of the lenders’ assets.