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Commerzbank is open to talks about a potential tie-up with UniCredit, according to people familiar with the discussions, after the Italian bank caught much of the German establishment off-guard by taking a 9 per cent stake in its rival.
UniCredit spent up to €1.4bn to become the second-largest Commerzbank shareholder after the German government, acquiring a 4.5 per cent stake from the Finance Agency on Tuesday night and a similar amount of shares on the open market.
Berlin’s announcement last week that it was planning to sell down its remaining 16.5 per cent stake in Commerzbank appears to have paved the way for UniCredit’s chief executive Andrea Orcel to launch a manoeuvre that took the German establishment off-guard.
People familiar with Commerzbank’s internal discussions told the Financial Times that the German lender had not been contacted by UniCredit in advance and learnt about the transaction on Wednesday morning via regulatory statements.
German officials said they were surprised that UniCredit bought the whole 4.5 per cent package, and had expected that several investors would buy the stake. “UniCredit did not discuss its plans with the government prior to the purchase,” one official said.
A spokesperson for the finance ministry, Nadine Kalwey, said UniCredit had made “no concrete offer” to the government prior to buying the 4.5 per cent stake.
The move by the highest-profile dealmaker in European banking opens the door to long-awaited consolidation on the continent.
UniCredit said on Wednesday that it would submit the paperwork needed to allow it to increase its stake in Commerzbank above 9.9 per cent, although a decision to raise its shareholding further would “depend on the investment meeting UniCredit’s strict financial parameters”.
The German government now holds a 12 per cent stake, and has committed to a lock-up period of 90 days before selling any more Commerzbank shares. But with the bank now in effect in play, shares in the Frankfurt-based lender jumped by close to a fifth.
Commerzbank said in a statement that its boards would “continue to act in the best interest of all our shareholders and our key stakeholders”. UniCredit said it would “engage with Commerzbank AG to explore value-creating opportunities for all stakeholders in both banks”.
The people familiar with Commerzbank’s internal discussions said it would assess UniCredit’s plans with an open mind.
UniCredit, which has a market capitalisation more than three times that of Commerzbank, was trading 1 per cent higher by mid-afternoon in Milan.
Previous attempts at consolidation among European banks have stalled in part because of political and regulatory hurdles. UniCredit has been one of the Eurozone’s strongest performers this year, however, and has long been considered the frontrunner for an acquisition of Commerzbank.
The Italian bank already owns Munich-based lender HypoVereinsbank and a combination of both operations has the potential to generate a German finance powerhouse able to challenge the country’s largest lender Deutsche Bank.
Deutsche walked away from merger talks with Commerzbank in 2019 because of an overlapping client base among German companies — a problem not faced by Commerzbank and HVB.
However, insiders expect that Deutsche would likely reconsider a potential merger in case of a foreign bid for Commerzbank to avoid the creation of a bigger domestic rival. Deutsche said it did not “comment on our competitors”, adding that it was “focused on its growth strategy”.
UniCredit’s stakebuilding has already met resistance from one of Germany’s most powerful unions, with a senior official vowing to fight any attempted takeover by the Italian bank “tooth and nail” and branding Berlin’s decision to sell “utterly naive”.
The finance ministry said the government had sold the 4.49 per cent stake in Commerzbank to UniCredit because its bid was “by far” the highest. UniCredit is understood to have paid €13.20 per share, a premium of close to 5 per cent above Tuesday’s closing price.
“The government is bound by the principle of economic efficiency,” the finance ministry said.
The disclosure of UniCredit’s stake comes hours after Commerzbank said its chief executive would step down at the end of his contract, after deciding not to seek another term.
The bank said it would start the search for a successor “immediately”.
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