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Shares in Deutsche, Commerzbank rise on merger speculation

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Shares in Deutsche, Commerzbank rise on merger speculation
FILE PHOTO: Banners of Deutsche Bank and Commerzbank are pictured in front of the German share price index, DAX board, at the stock exchange in Frankfurt, Germany, September 30, 2016. REUTERS/Kai Pfaffenbach/File Photo   -   Copyright  Kai Pfaffenbach(Reuters)
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FRANKFURT (Reuters) – Markets welcomed the prospect of a merger between Deutsche Bank and Commerzbank on Monday with shares in both lenders trading higher following reports that Germany’s largest banks are exploring the feasibility of a merger.

Germany’s Welt am Sonntag newspaper was the first to report on the early stage merger talks, and said Berlin politicians expect a decision in the coming weeks.

Deutsche Bank agreed to hold tentative talks with Commerzbank, a person with knowledge of the matter told Reuters on Saturday.

Deutsche and Commerzbank declined to comment on the prospects of a merger.

Deutsche Bank shares were up 1.6 percent higher while Commerzbank shares were 4.3 percent higher at 0820 GMT, outperforming Germany’s blue-chip DAX index which was 0.4 percent higher.

Proponents of a merger say that a tie-up would give a combined entity — which would have an equity market value of more than 24 billion euros (20.78 billion pounds) based on Friday’s closing share prices — a 20 percent share of the German retail banking market.

(Reporting by Edward Taylor; Editing by Keith Weir)

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