Investment Thesis
From a Deutsche Bank (DB) perspective, we understand the strategic drivers for the deal as it would shift the business mix and the badwill (Commerzbank trades at 0.3x P/TBV) could serve as an indirect capital raise. However, from a Commerzbank perspective, we believe the transaction is far less attractive unless it includes a sizable premium.
In fact, Commerzbank's (CBK) stock price rose about 80% in 2018 on stand-alone fundamentals. CBK has strengthened its balance sheet, reduced asset quality risks and is gaining market share in German retail banking. More