The trip of the German government it was of no use since UniCredit does not intend to remove Commerzbank from its sights: after the recent block on the sale of new shares by Berlin, the Italian bank has announced that it has presented the ECB “regulatory request for the acquisition of a shareholding greater than 10% and up to 29.9% in Commerzbank”. Meanwhile, on Monday 23 September, “it subscribed for financial instruments with a stake equal to approximately 11.5% of the share capital” of Commerzbank.
UniCredit wrote this in a note, specifying that “the related settlement in shares can only take place subject to obtaining the relevant authorizations”. Currently, it is reported, UniCredit “has reached approximately 21%” by Commerzbank.
Olaf Scholz attacks UniCredit
The German Chancellor Olaf Scholz blames UniCredit’s ambitions, dismissing them as “unfriendly attacks, hostile takeovers” that “are not a good thing for the banks.” Scholz said this in response to a question about the Commerzbank/UniCredit case, while he was visiting New York. “The government,” he added, “has taken a clear position and says clearly: we believe that it is not appropriate in Europe and in Germany to proceed with unfriendly methods, without any spirit of cooperation And without agreeing on anythingto participate in an enterprise”.
Initially, it was the German government itself that wanted to put the 12% of Commerzbank shares held by the state on the market. After UniCredit’s move, Berlin closed in and blocked the sale.
UniCredit is down on the stock market
The latest news on the Commerzbank/UniCredit case has hurt the Italian banking group, which has slipped by 3.28% on the stock exchange. The previous chapters of the negotiations had seen the performance of both actors substantially unchanged.
Every scenario is open
For UniCredit every road is open: the bank led byCEO Andrea Orcel could continue to buy shares in Commerzbank, but it could also choose the path of sale. The note specifies that “the majority of UniCredit’s financial exposure is hedged, in order to ensure full flexibility to remain at this level, sell the stake, with a hedge in case of downturns, or further increase it, depending on the outcome of the discussions with Commerzbank, its management and supervisory boards and, more generally, all its stakeholders. stakeholders in Germany”.
UniCredit “believes that there is significant value creation potential that can be extracted in Commerzbank, both in a standalone scenario and in UniCredit, for the benefit of Germany as a whole and all its stakeholders”. “However, – it is specified – as happened for UniCredit itself, the development of this potential requires the adoption of concrete actions”.
With these steps, Orcel aims to reassure the German government. The crux of the matter concerns any staff cuts post-acquisition feared by the unions. But behind the wall erected by Berlin there is also a question of prestige, since the federal elections will arrive in exactly one year and the parties are in fibrillation. In recent weeks UniCredit has bought up about 9% of Commerzbank, half on the market and the other half during an auction called by the German government. A government that has said it is completely unaware of the intentions of the Italians.
One step away from the takeover bid
If the ECB gives the green light, UniCredit could reach 30% of Commerzbank (reaching 29.9%, to be precise). With just an additional 0.1% it could aim for a takeover bid.
The role of the ECB
Orcel knows he can count on support from the ECB, which has already expressed its support for cross-border mergers. “We have always been in favor of cross-border mergers. Whenever one occurs, national concerns typically arise… The important thing is how appropriate the merger is from the point of view of the business model,” said ECB Vice President Luis de Guindos a few weeks ago regarding the Commerzbank/UniCredit case.
The ECB is pushing for the creation of a European banking supergroup that can compete with the Chinese and American giants. A possible acquisition of Commerzbank by UniCredit would create a credit titan, in terms of turnover even greater than Deutsche Bank.
