Chancellor Merz Slams Unicredit's "Underhanded" Play for Commerzbank
Unicredit's actions are deemed 'intolerable' by Merz
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Italian megabank Unicredit's sneaky attempts to acquire Commerzbank have drawn ire from Chancellor Friedrich Merz. In a fiery letter, Merz dubbed Unicredit's tactics as unacceptable and beneath contempt.
According to the letter, which was shared by Commerzbank's works council chairman, Sascha Uebel, on LinkedIn, Merz stands firmly behind Commerzbank's independence. The Chancellor is keeping a watchful eye on the situation, with Financial Minister Lars Klingbeil informing him of any significant updates.
Unicredit sneakily bought shares of Commerzbank following the German government's partial exit in September, becoming the bank's second-largest shareholder with approximately 28% ownership through financial instruments. Unicredit aims to merge Commerzbank with its Munich-based subsidiary, Hypovereinsbank (HVB), but faces stiff resistance from both the bank and the German government, which owns a 12% stake.
Unicredit CEO Andrea Orcel remains unfazed, insisting, "We have 30 percent." Orcel remains nonchalant, stating they can wait until 2027 to make a decision on a potential takeover. Options abound: maintaining the stake, selling it for profit, or engaging in takeover discussions.
While Merz and Klingbeil's exact comments on the situation are not available, the political landscape in Germany and regulatory hurdles present significant challenges for Unicredit. Analysts warn that pushing the deal amid political instability could strain relationships with future policymakers. Additionally, Commerzbank employees have spoken out against potential takeover moves by Unicredit.[1][2][3][4]
Players:
- Commerzbank
- Unicredit
- Friedrich Merz
- Lars Klingbeil
- Banks
German Law and Regulation:
Under German law, a stake of 30% or more requires Unicredit to make a cash-or-share bid, potentially straining its capital reserves. The European Central Bank has approved an increase up to 29.9%, but converting derivatives into physical shares may face objections from the Federal Cartel Office concerning antitrust issues.[1]
Political Landscape:The political climate in Germany, especially given recent coalition developments, poses a challenge for Unicredit. Analysts caution that attempting the takeover during political instability could alienate future policymakers. Moreover, Commerzbank's employees have voiced objections to the potential takeover by Unicredit.[1][2]
Valuation Concerns:Unicredit CEO Andrea Orcel has expressed concerns that the current valuation of Commerzbank shares is inflated, divergent from the bank's fundamentals. Unicredit plans to complete the conversion of its derivative stake into equity by the end of June, with potentially until 2027 to decide on further action.[3][4]
The current situation involving Unicredit's play for Commerzbank is closely monitored by German policymakers, as statements from Chancellor Friedrich Merz and Finance Minister Lars Klingbeil reveal their firm stance on Commerzbank's independence. The political landscape, regulatory hurdles, and valuation concerns in Germany may pose significant challenges for Unicredit, particularly in light of potential antitrust issues and opposition from Commerzbank's employees. Additionally, the implementation of community and employment policies, as well as finance considerations, are critical factors in navigating the business implications of this merger proposal.
