Germany intensified its resistance to UniCredit's bid for Commerzbank on Wednesday, as the Italian bank's CEO, Andrea Orcel, stated he would only proceed with a takeover if it had substantial shareholder support and advocated for discussions with the government. Two weeks after UniCredit disclosed a surprise stake in Commerzbank and Orcel outlined potential plans for a cross-border merger, the conflict is escalating. Berlin, which holds a 12 percent stake in Commerzbank, along with the bank's management and trade unions, are all against the deal. A senior German official described UniCredit's actions as 'aggressive' and 'unwise'.
Orcel has maintained that all options, including withdrawing, are on the table while increasing UniCredit's stake. 'Commerzbank, for us at the moment, is an investment, nothing else. There is no offer, there is no bid,' Orcel stated at a Bank of America investor conference in London. He emphasized that UniCredit would not seek a seat on Commerzbank's board. However, Orcel also called for more dialogue, noting that UniCredit had engaged 'repeatedly with several stakeholders of Commerzbank' before being invited to purchase a 4.5 percent stake from the German government.
UniCredit's recent move to raise its holding in Commerzbank to nearly 21 percent, pending European Central Bank approval, using derivative instruments, has angered the German government. German Chancellor Olaf Scholz condemned the action as 'an unfriendly attack,' and Finance Ministry State Secretary Florian Toncar warned UniCredit against becoming hostile, highlighting the significant risks involved in such takeovers.
Orcel's strategy is a significant test for European banking consolidation, which regulators and banking executives have long sought but has been hindered by political opposition and the financial weakness of many banks. Commerzbank announced on Tuesday that Bettina Orlopp will soon take over as CEO, tasked with defending against UniCredit's bid for Germany's second-largest lender. Commerzbank's shares have surged since Orcel's move, as investors anticipate a full takeover bid from UniCredit, which is flush with cash from record profits and already has a presence in Germany through its ownership of HVB.
Michael Schrodi, a lawmaker from Germany's governing coalition SPD party, criticized UniCredit for being 'utterly secretive' in acquiring 21 percent of Commerzbank, partly through financial derivatives.
