Banks Unicredit increases its stake in Commerzbank

Spectacular turnaround in the takeover battle for Commerzbank: the major Italian bank Unicredit has secured further shares in the Frankfurt Dax group via financial instruments and now holds a good fifth of the shares.

At the same time, Unicredit intends to further increase its stake in Commerzbank. This makes an official takeover bid for Germany's second-largest private bank more likely - despite resistance from the German government, which does not want to sell any more Commerzbank shares for the time being.

Unicredit indirectly acquired access to a further 11.5 percent of Commerzbank shares via financial instruments, bringing its arithmetical stake to around 21 percent, as the bank announced. Including the financial instruments, the Italians would be by far the largest Commerzbank shareholder ahead of the federal government, which holds 12 percent.

The settlement via the financial instruments is only possible after approval by the supervisory authorities. At the same time, Unicredit applied for permission to increase its stake to up to 29.9 percent. This will be decided by the banking supervisory authority at the European Central Bank (ECB). From 30 percent, Unicredit would be legally obliged to submit a public takeover bid.

The further procedure depends on the results of the talks with the Board of Managing Directors and Supervisory Board of Commerzbank as well as other parties involved in Germany, Unicredit wrote. It had secured its economic commitment in such a way that it could sell its stake again at a limited discount.

Orcel goes on the offensive

With the new increase, Unicredit CEO Andrea Orcel is making a U-turn. Just last week, the manager had publicly stated that he was not aiming for a hostile takeover. The stake in Commerzbank could also be sold again at a profit. But now it no longer looks that way.

Unicredit had taken advantage of the German government's partial exit from Commerzbank and surprisingly acquired a stake in the DAX-listed group. The German state had saved Commerzbank from collapse with billions during the financial crisis and wanted to gradually sell its stake - but was then taken by surprise by Unicredit's entry.

The federal government stands in the way

The Italians cannot expect any further help from the federal government for the time being. After the German government recently sold 4.5 percent of Commerzbank shares to Unicredit, it intends to retain its remaining stake "until further notice", as the federal finance agency announced on Friday evening.

However, it remained unclear exactly how long "until further notice" means. In Berlin, Unicredit's action is seen as a raid. Commerzbank, for its part, took note of the news from Milan: "It remains the case that the Board of Managing Directors will continue to responsibly examine strategic options in the interests of its investors, customers and employees."

The bank's management is currently meeting in the Taunus region, where it originally wanted to discuss updates to its Strategy 2027, which aims to make the bank more profitable. Now, completely different issues are coming to the fore. Nothing less is at stake than Commerzbank's independence more than 150 years after it was founded in 1870.

Concerns about job cuts

Unicredit is worth more than 60 billion euros on the stock exchange and could afford a takeover of Commerzbank, which is only valued at around 18 billion euros. A takeover would create a European banking giant. The trade union Verdi and the Commerzbank General Works Council fear that a deal would result in a clear-cutting.

Two thirds of jobs could be lost, said the Chairman of the Commerzbank General Works Council, Uwe Tschäge. At the end of June, Commerzbank reported that it had around 38,700 full-time positions worldwide, including more than 25,000 in Germany. Commerzbank also plays an important role as a financier of the German Mittelstand, warns Verdi.

The employee representatives cite the Unicredit subsidiary HypoVereinsbank (HVB), which was taken over by the Italians in 2005 and has shrunk considerably since then, as a cautionary example. HVB now only operates in the legal form of a limited liability company under the umbrella of Unicredit.