Commercial heads convene with their counterparts from Unicredit.
UniCredit has quietly acquired a significant majority of Commerzbank shares and are eager for more ownership. The Frankfurt-based establishment regards a takeover with suspicion, but the new chief executive has no choice but to negotiate with the Italians.
Commerzbank and UniCredit representatives will meet for the first time this coming Friday, with the Italians now having a stake in the Frankfurt institution. At an investor conference, new Commerzbank CEO Bettina Orlopp mentioned the importance of discussing things further, without disclosing the location of the meeting. They will evaluate all offers on the table. "We won't make any foolish moves," Orlopp stated. The recent events have left Commerzbank surprised.
UniCredit now owns roughly 21% of Commerzbank shares, making them the single largest shareholder in the Frankfurt institution, far surpassing the state, which still holds around 12%. UniCredit has also expressed their desire for even more shares.
In mid-September, UniCredit shocked Commerzbank's leadership and the German government by revealing that they owned 9% of Commerzbank shares. Half of the shares were purchased from the German state, leaving both the responsible federal financial agency and the finance ministry astonished.
The German state plans to phase out their investment in Commerzbank, having bailed the institution out with billions in taxpayer funds during the financial crisis. On September 10, they sold their initial 4.5% stake during an auction.
It wasn't until UniCredit's purchase of an additional 4.7% of Commerzbank shares was confirmed that their acquisition remained a secret, as the 3% reporting threshold wasn't initially reached.
The German government does not intend to block a takeover
UniCredit later utilized financial instruments to secure an additional 11.5% of shares, giving them the potential to take control in the future. However, they currently lack the necessary approval from the ECB to increase their stake beyond the 10% threshold. Application for this approval has been made. If approved, UniCredit would be able to secretly increase their stake to 29.9%, requiring a public takeover offer for all Commerzbank shares only once they surpass the 30% threshold.
The Verdi union and Commerzbank's works council strongly oppose a merger with the Milan bank, while the Commerzbank management views a possible takeover with skepticism. The German government has expressed disapproval of a hostile takeover but lacks any defensive measures in place.
Meanwhile, Union Investment has urged Commerzbank to engage in "open dialogue". "A partnership with UniCredit – regardless of the form – doesn't have to harm Commerzbank," Union Investment investment manager Alexandra Annecke stated. Union Investment manages funds for German Volks- and Raiffeisenbanks and holds around 1.5% of Commerzbank shares.
Since UniCredit's entry, Commerzbank shares have risen by nearly 28%.
The Commission may need to monitor UniCredit's continued acquisition of Commerzbank shares due to potential competition concerns. The Commission's involvement is crucial as UniCredit's stake in Commerzbank approaches the threshold requiring a public takeover offer.
In light of The Commission's potential involvement, Commerzbank and UniCredit representatives are under pressure to negotiate extensively before any major decisions are made.
