Unicredit Boosts Stake in Commerzbank to 28 Percent, Acquisition Prospects Intensify
The Italian banking giant Unicredit has increased its ownership stake in Commerzbank, Germany's second-largest private bank, to approximately 28 percent. This strategic move, communicated from Unicredit's headquarters in Milan, signals growing ambitions for a potential acquisition. Unicredit's management has expressed confidence in the untapped value within Commerzbank, suggesting that significant opportunities for enhancement exist.
Currently, Unicredit holds a direct stake of 9.5 percent in Commerzbank, while the remaining 18.5 percent is attributed to various financial instruments. The bank has indicated its intent to seek regulatory approval from the European Central Bank (ECB) for a potential increase in its stake to 29.9 percent. This regulatory process is actively underway, with discussions ongoing with relevant authorities.
In response to these developments, a spokesperson from Commerzbank refrained from commenting on the specifics of Unicredit's announcement, stating that the bank remains focused on advancing its strategic initiatives, which are set to be detailed in a forthcoming announcement scheduled for February 13.
Commerzbank's CEO, Bettina Orlopp, has previously emphasized the bank's commitment to maintaining its independence, categorizing Unicredit as a strategic investor rather than a prospective acquirer. However, she acknowledged that Commerzbank is open to discussions regarding consolidation if a beneficial proposal arises that could advance the German and European banking landscape.
Unicredit, on its part, has stressed that its current involvement with Commerzbank is purely an investment. CEO Andrea Orcel has indicated that he believes more value could be derived from Commerzbank, particularly in conjunction with Unicredit's subsidiary, Hypovereinsbank (HVB), given the limited overlap in their operations within the German market.
The initial investment by Unicredit in Commerzbank was facilitated in September when the Italian bank capitalized on the partial exit of government ownership. This allowed Unicredit to secure options for increasing its stake significantly. It is important to note that any stake exceeding 30 percent would necessitate Unicredit to make a public takeover offer to Commerzbank's shareholders. Financially, Unicredit is well-positioned for such an acquisition, boasting a market capitalization of nearly 63 billion euros, which is more than three times that of Commerzbank, valued at approximately 18.7 billion euros.
Market analysts are expressing concerns regarding the feasibility of Unicredit's ambitions, particularly as the bank is simultaneously pursuing its domestic competitor, Banco BPM. Unicredit has clarified that its investment in Commerzbank will not impact its ongoing negotiations with Banco BPM.
The German government has signaled its decision to retain its current stake in Commerzbank, which it acquired during the financial crisis of 2008-2009 to stabilize the institution. The government currently holds approximately 12 percent of Commerzbank's shares. There is notable criticism of Unicredit's approach from various political quarters, with Chancellor Olaf Scholz previously labeling the takeover attempts as unfriendly. However, the government has stated that any potential acquisition would ultimately be the responsibility of market participants.
The union Verdi has raised alarms about the potential job losses that could result from an acquisition, recalling the significant workforce reductions that followed Unicredit's previous acquisition of HVB in 2005. Verdi has urged the government to consider designating Commerzbank as part of Germany's critical infrastructure, which would afford it additional protections similar to those given to energy suppliers and hospitals. The recent developments from Milan have added to the anxiety among Commerzbank employees as the holiday season approaches.
