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Commerz ends merger talks
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September 11, 2001: 4:48 a.m. ET
German bank ends talks with Italy's Unicredito over share price, valuation
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LONDON (CNN) - Germany's Commerzbank and Italian bank Unicredito have ended merger talks amid differences in valuation and tumbling share prices.
The collapse in talks on Tuesday is another blow for Commerzbank, Germany's fourth-largest bank, which failed to merge with rival Dresdner Bank last year. It also strikes a blow for cross-border European banking mergers.
 Commerzbank's stock fell 1.4 percent in early Frankfurt trade, but has fallen more than 22 percent this year. UniCredito's stock has fallen about 18 percent since reports of the takeover were leaked in early August.
A bid by UniCredito, which has a market value of around  22 billion ($20 billion) against Commerzbank's 14 billion, would have been an all-paper offer.
"When you see the share price falls at Commerzbank and even more so those at UniCredito over the past few days... it did not make it possible to reach a fair price," Commerzbank spokesman Peter Pietsch told Reuters.
"The markets have to play along and they haven't done that," he added. "UniCredito has to be able, of course, to offer its shareholders a sensible deal." Commerzbank would remain open to talks with other possible partners as long as the conditions were right, Pietsch said.
The company – a persistent target of takeover speculation – has been under pressure from investor group Cobra, which owns 10 percent of Commerzbank, to find a merger partner. Several European banks have been reported this year to be interested in Commerzbank, including Deutsche Bank, HSBC and ABN Amro.
A merger with UniCredito, Italy's second-largest bank, would have created Europe's 10th biggest bank by market capitalization, according to Reuters data. The deal would have given the Italian bank access to Europe's biggest market.
Commerzbank, which reported last month that its second-quarter profit plunged 87 percent amid gloomy financial markets and rising costs, is left with little to do but control costs. The bank has introduced a hiring freeze and cancelled IT projects in a bid to save 240 million in the current year. 
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