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German lawmakers ready to block public cash for Deutsche-Commerzbank

BERLIN ( ) – Lawmakers are warning Germany’s finance minister that they will block any attempt to invest public money into a merged Deutsche Bank and Commerzbank, a deal which could require up to 10 billion euros ($11.2 billion) of fresh capital.

They intend to deliver this message at a closed-door meeting next week with Olaf Scholz, although it is unclear whether the Social Democrat finance minister still plans to attend.

“The merged bank will probably need fresh capital. One thing that we will not stand for is that the state gives more money,” said Bettina Stark-Watzinger, who chairs the Bundestag’s finance committee, emphasizing a hurdle to any deal.

Deutsche Bank’s exploratory merger talks with state-backed Commerzbank come after prodding by Germany’s finance ministry, which is worried about the future of the country’s biggest bank.

A deal would see Berlin become a shareholder in the combined group, which one German official said will need up to 10 billion euros of fresh capital because of restructuring costs and the fact that losses on investments could be triggered by a tie-up.

While German parliamentarians cannot stop the merger itself, they are warning that the Bundestag can block any fresh money to fill a capital shortfall, a crucial pillar to any deal.

“This goes contrary to one of the lessons of the financial crisis – that the taxpayer should not foot the bill for troubled banks,” Stark-Watzinger said,夜上海419龙凤论坛Sabine,.

A spokesman for Scholz, who was the first to publicly reveal the merger talks but has since sought to distance himself from the process, insisting it is up to the banks to decide on their future, declined to comment, as did Deutsche Bank.

Related CoverageDeutsche Bank and Commerzbank divided over pace of merger talks: sources“UNTHINKABLE”

Lothar Binding, a leading Social Democrat on the committee, also said the government needed approval from the Bundestag if it wanted to back the merged group with fresh funds.

This would not be triggered if Germany’s 15 percent Commerzbank stake automatically translates into a roughly 5 percent stake in the merged group, but approval is needed if the bank asks investors for fresh money, as expected.

“As things stand, it is unthinkable that the Bundestag would agree,” said Binding. “Any synergies in this deal would come at an immensely high price: huge unemployment. 25,000 to 30,000 jobs could go. I’m against a merger.”

Some conservatives are similarly opposed t,上海夜网Tabitha,o the deal.

“We need competition in the banking market, not mega mergers,” said Hans Michelbach, a lawmaker from the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel’s Christian Democratic Union.

“How on earth can we sell a merger with this bank to our voters? I won’t support it under any circumstances.”

Frustration has been growing in parliament because lawmakers believe Scholz is i,上海夜生活网交流Idaline,gnoring their concerns.

Through its stake in Commerzbank, the German government would become a top shareholder in a merged group, playing a central role in any fusion. Lawmakers fear this puts it on the hook to shoulder losses if the bank later runs into trouble.

Berlin could yet pull the plug if it believes a deal would be politically unpalatable.

“This merger is rubbish. It will cost not only jobs but hard cash as well,上海夜生活” said Lisa Paus, a Green party member of parliament, adding that she would reject any government participation in a capital hike.

“It is a running joke in parliament: ‘Where is Scholz?’, she said, adding that his failure to explain the merits of a merger had infuriated many lawmakers. “He doesn’t speak to us.”

Blackstone buyout fund raises $22 billion, to set record: source

( ) – Blackstone Group LP, the world largest alternative asset manager, has raised over $22 billion for ,上海夜生活网交流Mabel,its latest buyout fund, setting it on course to be the private equity industry’s biggest ever, 上海夜生活a person familiar with the matter said on Wednesday.

The strong fundraising underscores how investors are brushing aside concerns over the private equity sector overheating, as they search for returns that beat the stock market by a wide margin. The industry has raised some $3 trillion from investors since 2012, according to industry tracker Preqin.

New York-based Blackstone, led by co-founder Stephen Schwarzman, expects to conclude the fundraising for what will be its eighth buyout fund later this year, said the source, requesting anonymity as the details are confidential.

Blackstone has not set a fundraising target, but it anticipates the buyout fund will overtake Apollo Global Management’s $24.6 billion fund as the largest ever, the source added.

This is a departure from the traditional fundraising model, whereby managers set caps on the size of the fund targeted to allay investor concerns over amassing more capital than they can prudently invest.

Blackstone President Jon Gray had said in January the firm expected the fund to exceed $20 billion in size. A Blackstone spokeswoman declined to comment on the progress of the fundraising, which was reported earlier by Bloomberg News.

Blackstone has a target of reaching $1 trillion in assets under management by 2026. At the end of 2018, it had $472.2 billion in total assets under management.

Blackstone, which had $44.4 billion in private equity funds it had raised but yet to invest at the end of 2018, has been pursuing several large leveraged buyouts in recent years.

Last year, it purchased a majority stake in the Financial and Risk business ,上海凤楼夜网Landon,of Thomson Corp, the parent company of News, in a $20 billion deal.

Acquisition prices in leveraged buyouts are rising on the back of increased competition for deals, setting off alarm bells among private equity backers.

According to Cambridge Associates, a private equity investment adviser, the U.S. industry’s average internal rate of return (IRR), a key benchmark for private equit,上海晚上耍女人的地方Ebba,y returns, was just under 10 percent in 2015, the most recent year for which it compiled data.

Blackstone’s seventh flagship buyout fund, which raised $18.6 billion in 2016, has so far posted a net IRR of 21 percent. Its sixth fund, raised in 2011, has a total net IRR of 13 percent.