Germany's Chancellor Gerhard Schroder recently met Citigroup chairman Sandy Weill and is said to have assured him that his government (Schroder's that is!) would not stand in the bank's way if it made a bid for a German financial institution. Commerzbank has recently cleaned up its balance sheet and is thought by many to be readying itself for sale. All of a sudden, all German banks are 'in play'.
And even mighty Deutsche Bank is not immune. The New York Times reports that that bank's shares rose 5% Wednesday amid rumours that Citigroup was considering making a bid for the bank. Now most in the know feel that, given the political climate in Germany, a hostile bid is unlikely and Deutsche would certainly not be a willing bride. It is well known that the only deal it would be interested in would be one where it would remain the dominate partner. Clearly, with Citigroup, this would not be the case.
Truth to tell, none of the major German banks can truly rule out a deal and, with ABN Amro, Barclays, Credit Suisse and Royal Bank of Scotland all reportedly looking carefully at Germany, many feel that the German banks will themselves have to merge if they are to avoid the possibility of a cross-border takeover.