Italy's UniCredito plans nearly 10,000 job cuts if it takes over Germany's second biggest bank, HVB Group, as expected, a source close to the deal said on Saturday. "The cuts will be in Germany and in eastern Europe but they will be pretty light in the overall scheme of things, when you compare this deal to other mergers," said the source, who declined to be named. "It's in the high single-digit thousands."
Negotiators are also likely to produce surprisingly high cost-savings targets from the transaction - expected to value HVB at more than 15 billion euros ($18.35 billion) - when details are unveiled, the source said.
"People will be surprised," said the source.
Both banks' boards are expected to approve the offer on Sunday.
Analysts have predicted cost-saving synergies of 415-425 million euros by laying off staff in eastern Europe and merging the banks' technology platforms in Austria and Germany.
The two groups' combined employee base totals over 127,000. If the deal is completed, it would represent Europe's biggest cross-border bank merger ever and create the region's ninth-biggest bank by market capitalisation.
The deal would also give the Italian bank market leadership in central Europe through HVB's Vienna-listed Bank Austria Creditanstalt.
The source said the group would be organised under Italian law and UniCredito Chief Executive Alessandro Profumo would play the role of a strong leader as head of the new management board even if German managers from HVB would be well-represented on the board.
"There is no doubt about the fact that Profumo will be in charge and accountable for delivering," he said.