Unexpectedly, Unicredit Italian Branch Registers Uptick in Involvement at Commerzbank
The German state-controlled financial institution declared on a Tuesday night that they intend to decrease their ownership in Commerzbank from 16.5% to 12%, serving as an initial step, with the ultimate objective of completely parting ways from the bank that underwent state rescue during the 2008 financial crisis.
Unicredit emerged victorious in the bidding process due to their 13.20 euro per share offer, which was deemed significantly superior to all other offers. A spokesperson from the Finance Ministry conveyed this on Wednesday. The selection process adhered to principles of fairness and non-discrimination, with the state emphasizing its commitment towards economic efficiency, thereby selecting the highest bid.
Unicredit expressed their intention to submit applications for acquiring additional shares, granted that the stake surpasses the 9.9% limit. "The state will first analyze the revised scenario," the ministry spokesperson said, further adding that an initial 90-day prohibition on selling further shares is in effect. Consequently, with a 12% shareholding, the state preserves the position of being Commerzbank's largest individual shareholder.
Unicredit guaranteed their backing for Commerzbank's management and supervisory boards, pledging to foster their efforts in enhancing the bank's productivity. They aspire to collaborate with Commerzbank to explore potential value-creation opportunities for the shareholders of both entities.
Commerzbank celebrated its highest profit in 15 years in 2022, reporting a 55% surge in consolidated profit to 2.2 billion euros compared to the preceding year. Revenue witnessed an increase of over 10% to reach 10.5 billion euros.
The bank lauded the Italians' entry as a testament to Commerzbank's significance and ongoing progress. They vowed that the management and supervisory boards would continue to serve the interests of all shareholders, as well as their employees and customers.
Post the state share sale and Unicredit's announcement, Commerzbank shares saw a spike in value. Upon the Frankfurt stock exchange's trading commencement on Wednesday morning, the share price increased by more than 15%.
Nevertheless, the trade union sector voiced severe opposition to the move. "We will fiercely resist Unicredit's takeover using all our available means," expressed Stefan Wittmann, a Verdi union representative as well as a Commerzbank supervisory board member, to the "Handelsblatt." "We are determined to avoid the same fate that met the Hypo-Vereinsbank." Unicredit had bought the Munich bank in 2005 only to then cut thousands of jobs and shift competencies to Milan.
Wittmann appealed to the federal government, urging them: "I expect the state to fulfill its industrial policy responsibility for Germany's location and dissuade a Commerzbank takeover by Unicredit."
The Commission might need to review the sale of Commerzbank shares to Unicredit, considering the potential impact on Germany's financial market stability. The German government should consider the long-term impact on Commerzbank's employees and stakeholders before approving such a transaction.
