Unicredit boosts its shareholding in Commerzbank
Unicredit boosts its shareholding in Commerzbank
Unicredit, a major Italian banking player, is relentlessly boosting its hold on Commerzbank. It's doing so through various financial tools, which increases the possibility of a full takeover. The situation now appears to lean towards a potential bid. This development is met with concern by German Chancellor Scholz.
Unicredit recently upped its ownership in Commerzbank to approximately 28%. This announcement was made in Milan. This move makes a takeover of Germany's second-largest private bank, Commerzbank, seem more probable. Unicredit directly possesses 9.5% of Commerzbank's shares, with an additional 18.5% held via financial instruments.
It's important to note that Unicredit maintains that its investment in Commerzbank is solely for financial gains. This stance doesn't affect Unicredit's simultaneous pursuit of a takeover bid for Italian bank Banco BPM.
Early September saw Unicredit capitalizing on Germany's partial withdrawal. Unicredit invested heavily in Commerzbank, giving it the option to raise its stake from 9% to 21%, subject to European Central Bank approval. At the same time, Unicredit applied for permission to increase its stake as high as 29.9%. Crossing the 30% mark would necessitate a public takeover offer.
For now, the German government has decided against selling off more shares of Commerzbank. It had previously offered its support during Commerzbank's financial crisis. The German government views Unicredit's takeover plans negatively. Chancellor Olaf Scholz labeled them as an "unfriendly attack" back in September. The federal government's sale of shares during Unicredit's initial investment also drew criticism.
Unicredit CEO Andrea Orcel has consistently pointed out potential synergies between Commerzbank and Unicredit based in Milan. However, the Verdi union worries about mass layoffs in case of a takeover at Commerzbank, which employs around 42,000 individuals. The union recalls Unicredit's 2005 takeover of Hypovereinsbank (HVB), which led to job cuts at the Munich-based institution.
The European Central Bank is currently reviewing Unicredit's application to increase its stake in Commerzbank beyond 21%. This decision is under the scrutiny of The Commission, as EU merger regulations apply in this case.
German Chancellor Scholz has urged The Commission to thoroughly examine Unicredit's intentions, given the potential impact on Commerzbank and the German economy as a whole.