German WestLB, Dekabank 'preparing merger'

0 Comments | AFP, October, 2008

FRANKFURT (AFP) — German regional bank WestLB is setting a timeframe for a possible merger with Dekabank, an institution that manages funds for German savings banks, a WestLB management note said on Wednesday.

State-owned WestLB is under pressure from the European Commission to find a partner after benefitting from a five-billion-euro (seven-million-dollar) rescue package that included state aid earlier this year.

In Brussels, the European Commission said Wednesday it would conduct an in-depth probe of the German government's bailout plan for WestLB.

Meanwhile, WestLB and Dekabank have agreed to hold exclusive talks on a merger in the coming weeks, Dow Jones Newswires cited a memo to bank staff as saying.

"Dekabank has the mandate to discuss with...