SocGen, Santander Weigh Link with Germany's Commerzbank -- Reports

French bank Societe Generale SA and Spanish peer Banco Santander SA are weighing whether to link up with Commerzbank AG or even to acquire the German banking group, German daily Die Welt reported Friday, citing its sister publication Bilanz.

A SocGen delegation sounded out the German government about selling its 17% stake in Commerzbank, the newspaper said. The government's stake stems from its 2009 rescue of Commerzbank, Die Welt reported. But the government told the SocGen representatives that the government would make a decision in October at the earliest, when the latest health tests of European banks become known, the newspaper said.

The German government would lose more than 2.5 billion euros ($3.41 billion) if it were to sell its stake now, German daily Frankfurter Allgemeine Zeitung reported.

Die Welt said the Commerzbank's customer base of German medium-sized businesses could help the French and Spanish banks build out their own German operations, lessening dependence on their troubled home markets. They also like Commerzbank's deposit base that could shield them from uncertain financial markets, the newspaper said.

For its part, Commerzbank could benefit from Santander's retail prowess, the newspaper said.

Frankfurter Allgemeine Zeitung reported that SocGen had no comment on market rumors. The newspaper noted that Commerzbank's shares rose 4% on Thursday.

Newspaper websites: www.welt.de; www.faz.net

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