German Chancellor Olaf Scholz criticised UniCredit’s attempt to become the largest investor with a potential 21% stake in rival Commerzbank, according to Euractiv.
Unfriendly attacks, hostile takeovers are not a good thing for banks, and that is why the German government has clearly positioned itself in this direction.
UniCredit’s use of derivatives to more than double its potential stake before regulatory approval to actually own more than 9.9 per cent added pressure on European Central Bank (ECB) supervisors. They are now tasked with ruling on UniCredit’s request to purchase up to 29.9 per cent of Commerzbank shares.
His words prompted a 5.9 per cent fall in Commerzbank shares as investors reassessed the chances of a full takeover. Shares in Italy’s UniCredit also closed with a decline of 3.3 per cent.
UniCredit CEO Andrea Orcel’s bold attempt to establish Europe’s largest bank tested the EU’s determination to overcome national boundaries in order to remain globally relevant. Italian journalist and activist Maurizio Belpietro harshly criticised Scholz’s remarks on X:
Scholz calling Unicredit’s takeover of Commerzbank ‘hostile’ shows that the European Union does not exist. And that the little lessons from Brussels are only valid for us. Teutonic interests count more than anything and justify the barricades.
After unveiling a 9 per cent stake in Commerzbank this month, Orcel said he would push for a merger if he could garner support. Meanwhile, Friedrich Merz, the Christian Democrat opposition leader, called Orcel’s tactics “amateur” and the takeover a “disaster for Germany’s banking market.”
UniCredit, which holds up to €6.5bn in capital, bought Bavarian bank HVB in 2005, whose business is more profitable than Commerzbank’s. Academic and former ECB supervisor Ignazio Angeloni stated that “the ball is firmly in the ECB’s court.”
UniCredit could also just fold HVB into Commerzbank and have a large stake in a German bank. It’s not ideal, we’re still far from a ‘European JPM’, but it’s a first step in the right direction for Europe.
The move came after Germany’s financial agency said on Friday it would not sell more Commerzbank shares for now, as the bank’s strategy “geared towards independence.”
The escalation comes at a time of political turmoil in Germany, where three political parties continue to lose ground against the Alternative for Germany (AfD) party.
