italian financier unicreditGerman Finance Minister Jörg Kukies criticized the “very aggressive and very opaque” takeover bid for Commerzbank, stressing that hostile takeovers usually do not work.
“As a government, we need to protect the security and stability of the systemic banking sector,” Kukies told CNBC at the World Economic Forum in Davos on Thursday. “Hostile takeovers in systemic banks do not tend to be successful.”
UniCredit currently owns 9.5% of Commerzbank directly and 18.5% via derivatives, after acquiring a surprise stake in September and subsequently expanding its position.
Armed with a solid CET1 ratio (a measure of a bank’s strength and resilience) of 16.1% as of the third quarter, the Italian financial institution allowed the European Central Bank, which oversees the eurozone’s largest financial institutions, to increase its stake in Commerzbank. I’m looking for. Up to 29.99%.
The sudden and accelerated pace of UniCredit’s pursuit suggests that CEO Andrea Orcel, a veteran of Merrill Lynch mergers and acquisition deals, may ultimately be aiming for cross-border integration. This is causing speculation in the market.
The move by UniCredit, which already has a presence in Germany through a branch of Hippoferreins Bank, has so far received a lukewarm reception from Berlin’s divided government, with outgoing Chancellor Olaf Scholz warning of “unfriendly attacks and “Hostile takeovers are not good for banks.” ”
Domestic political divisions in December and upcoming elections may prevent the German government from tightly controlling the deal.
“In this particular case, the actions of the potential acquirer were very aggressive and very opaque and opaque,” Kukies told CNBC’s Karen Tso and Steve Sedgwick. “A hostile takeover is not a good thing for a system bank. So it’s all about the specifics of this case and not a general statement that Germany is not open to global investors.”
CNBC has reached out to UniCredit for comment.
Speaking to CNBC in November, just months after the surprise stake increase, Orcel said: “Let’s put it this way: If we hadn’t been invited to buy that stock, we wouldn’t be here. And it all started in a way.” I thought. ”
The Italian banking group’s simultaneous launch of an ambitious formal takeover bid for Italian peer Banco BPM in late November has raised questions about its commitment to the deal.
Commerzbank, on the other hand, is asserting its sole claim, and board members have warned that if the two banks were to merge, there would be significant job losses as a result of the merger.
The drive for cross-border integration in Europe was fueled by the controversial 2007 takeover of Dutch lender ABN AMRO and its subsequent demerger by a Royal Bank of Scotland-led consortium (which ultimately led to the financial crisis). (which led to the bank’s failure), it has declined somewhat since then. UniCredit’s Mr. Orcel, then a senior investment banker at Mary Lynch, advised on the transaction.
But analysts say banking consolidation in the region, particularly in Germany, is “long overdue.” Commerzbank had been targeted for takeover by Deutsche Bank, the country’s largest financial institution, until initial negotiations failed miserably in 2019.
“The statement that there will be no consolidation and no change in the German banking sector is completely wrong,” Kukies said on Thursday.
UniCredit and Commerzbank are scheduled to announce their fourth quarter results on February 11 and February 13, respectively.
Correction: This article has been updated to reflect that UniCredit’s earnings will be released on February 11th.
