Unicredit CEO Orcel recently rejected a hostile takeover of Commerzbank, and now he is increasing his stake again. The federal government, which does not want to sell any more shares for the time being, is on the defensive.
Spectacular turnaround in the takeover battle for Commerzbank: The Italian major bank Unicredit has used financial instruments to secure additional shares in the Frankfurt-based DAX group and already holds a good fifth of the shares. At the same time, Unicredit wants to increase its stake in Commerzbank even further. This makes an official takeover offer for Germany’s second-largest private bank more likely – despite resistance from the federal government, which does not want to sell any more Commerzbank shares for the time being.
Chancellor Olaf Scholz (SPD) sharply criticized Unicredit’s actions. “Unfriendly attacks, hostile takeovers are not what is good for banks,” said Scholz in New York. The federal government has therefore clearly positioned itself in this direction. The Verdi trade union expressed similar views. Trade union secretary and Commerzbank supervisory board member Stefan Wittmann spoke of an “aggressive step.”
Unicredit indirectly acquired access to a further 11.5 percent of Commerzbank shares via financial instruments, which brings its holding to around 21 percent, the bank announced in Milan. Including the financial instruments, the Italians would be by far the largest Commerzbank shareholders, ahead of the federal government, which holds 12 percent of the shares. However, the settlement via the financial instruments in shares is only possible after approval by the supervisory authorities.
At the same time, Unicredit applied for official permission to increase its stake to up to 29.9 percent. The decision on this will be made by the banking supervisory authority for the eurozone, which is based at the European Central Bank (ECB). If its stake reaches 30 percent, Unicredit would be legally obliged to submit a public takeover offer.
Orcel goes on the offensive
Unicredit wrote that further action would depend on the results of discussions with the Board of Management and Supervisory Board of Commerzbank and other parties in Germany. It had secured its economic commitment in such a way that it could sell its stake again at a limited discount.
With the new increase, Unicredit boss Andrea Orcel is making a U-turn. Last week, the manager publicly stated that he was not seeking a hostile takeover. The stake in Commerzbank could also be sold again at a profit. “The main players have to agree on such transactions,” Orcel told the “Frankfurter Allgemeine Zeitung”. But now it does not look as if Unicredit is only interested as a strategic investor.
Unicredit had taken advantage of the federal government’s partial exit from Commerzbank and had bought into the DAX-listed company. The German state had saved Commerzbank from collapse during the financial crisis with billions and wanted to sell its stake gradually – but was then taken by surprise by Unicredit’s entry.
The federal government is opposed – and is still only number two
The Italians cannot expect any further help from the federal government for the time being. After the German state recently sold 4.5 percent of Commerzbank shares to Unicredit, it wants to keep its remaining stake “until further notice,” as the Federal Finance Agency announced on Friday evening. However, it remains unclear exactly what period “until further notice” means. In Berlin, Unicredit’s actions are seen as a surprise move.
Commerzbank took note of the news from Milan. “The Commerzbank Board of Management will continue to responsibly examine strategic options in the interests of its stakeholders – investors, customers and employees,” said a spokesman.
The bank’s management is currently meeting in the Taunus and originally wanted to discuss updates to its 2027 strategy, with which the institute aims to become more profitable. Now completely different questions are coming to the fore. Nothing less is at stake than the independence of Commerzbank more than 150 years after it was founded in 1870.
Commerzbank significantly smaller on the stock exchange
Unicredit is worth more than 60 billion euros on the stock market and could afford to take over Commerzbank, which is only valued at around 18 billion euros. If a takeover were to take place, a European banking giant would be created.
The Verdi union and the Commerzbank general works council are already fearing a clear-cut. If a deal with Unicredit is reached, two thirds of the jobs could be lost, said the chairman of the Commerzbank general works council, Uwe Tschäge. At the end of June, Commerzbank said it had around 38,700 full-time jobs worldwide, of which more than 25,000 were in Germany. Commerzbank also plays an important role as a financier of German medium-sized businesses, warns Verdi.
The employee representatives cite the Unicredit subsidiary HypoVereinsbank (HVB) as a cautionary example, which was taken over by the Italians in 2005 and has since shrunk considerably. HVB now only operates in the legal form of a GmbH under the Unicredit umbrella.
Unicredit advertises benefits for shareholders
Orcel had repeatedly advocated the advantages of a merger – and at the same time clearly demanded that Commerzbank must become more profitable. There are opportunities for savings, especially in the central functions. On Monday, Unicredit also emphasized the advantages of a merger: they believe that Commerzbank has substantial value. This can either be released independently or together with Unicredit – “for the benefit of Germany and the shareholders of Commerzbank.”
Source: Stern
