UniCredit's Increased Stake in Commerzbank Raises Concerns
The Italian bank UniCredit has significantly increased its stake in Commerzbank, now holding 21 percent of shares, which has sparked fears of a potential hostile takeover. This move positions UniCredit as the largest single shareholder, raising questions about its future influence over Germany's second-largest private bank. CEO Andrea Orcel hinted at a strategic direction that could see the Italian bank taking charge of Commerzbank's operations, contingent upon cooperation with German management and stakeholders.
The news broke on Monday, revealing that UniCredit had raised its stake from 9 percent to 20.5 percent, with intentions to further increase it to 29.9 percent pending approval from the European Central Bank. This unexpected shift has left the German government, previously the largest shareholder with 12 percent, scrambling to respond.
Chancellor Olaf Scholz characterized the move as an “unpleasant attack,” expressing concerns over the implications for the German banking sector. He emphasized that such aggressive tactics are not conducive to the cooperative spirit expected within Europe. Scholz's remarks followed revelations that he was not fully briefed on the sale process, prompting an internal investigation into the circumstances surrounding the federal government's share sale to UniCredit.
Political and Economic Reactions to UniCredit's Moves
The response from German politicians has been mixed. Finance Minister Christian Lindner defended the sale, stating that the government should not maintain a long-term stake in a private bank, while other political figures expressed alarm over the potential consequences for the German economy. Friedrich Merz, the CDU's candidate for chancellor, criticized the government’s handling of the share sale, arguing that it was executed poorly and at a significantly undervalued price of €13.20 per share, compared to the €26 that was previously anticipated.
The ramifications of this transaction extend beyond politics, as Commerzbank plays a crucial role in financing German SMEs. An insider warned that a merger could jeopardize the bank's ability to support medium-sized enterprises, which constitute a significant portion of the country's economy. With Commerzbank financing around 30 percent of German export investments, concerns are mounting about a potential shift in focus towards Italian interests if UniCredit takes a more dominant role.
As speculation continues, Commerzbank's stock has already begun to reflect market anxiety, with shares dropping over 5 percent in Frankfurt following reports of the German government's rejection of UniCredit's aggressive acquisition strategy. In Milan, UniCredit's stock also fell by 3 percent, highlighting a broader downturn for Italian banks amid concerns about potential taxation on extra profits.
