German Government Rebukes UniCredit’s Surprise Move on Commerzbank Stake
In a bold move, Italian bank UniCredit has raised its stake in Germany’s Commerzbank to 28% using derivatives, sparking a strong rebuke from the German government. Berlin has labeled UniCredit’s approach as “uncoordinated and unfriendly,” citing concerns over the bank’s intentions.
A Complex Web of Interests
UniCredit’s CEO, Andrea Orcel, had previously stated that he would wait until after Germany’s federal elections in February to make a move on Commerzbank. However, the Italian bank has now upped the ante, leaving Berlin scrambling to respond. The German government is working to find a solution that benefits Germany, but its options are limited.
The Stakes Are High
UniCredit’s move has pitted Orcel against the German establishment, which is opposed to a takeover of Commerzbank. The Italian bank has built its stake largely through discreet derivative purchases, which can convert into shares. UniCredit is now waiting on European Central Bank clearance to own up to 29.9% of Commerzbank, just below the level that would trigger a mandatory takeover offer.
Pressure Mounts on Commerzbank Management
By securing a larger stake, UniCredit is positioning itself to exert greater influence over Commerzbank’s management, limiting the German lender’s strategic options. This move reinforces UniCredit’s view that substantial value exists within Commerzbank that needs to be crystallized.
Commerzbank Focuses on Its Own Strategy
Meanwhile, Commerzbank management remains focused on its own strategy, which it will present to investors on February 13. Shares in Germany’s second-largest bank were up 2.4% at 1445 GMT.
ECB Authorisation Process Ongoing
The ECB authorisation process, which can take up to 90 working days, is ongoing, and UniCredit is in touch with supervisors. The ECB declined to comment on the matter.
A Familiar Player in Germany
UniCredit is no stranger to Germany, having owned Bavarian bank HVB since 2005. Under Orcel’s leadership, UniCredit has tightened its grip on HVB and cut costs, providing a template to improve Commerzbank’s returns.
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