Yesterday’s move by the Italian bank Unicredit to acquire 9% of the German Commerzbank may lead in the largest European banking merger of recent years.

When Berlin went to the market yesterday to offer a package of Commerzbank shares it had no idea that the Italian banking group would jump at the chance. So the German government is currently in the uncomfortable position of holding nearly the same percentage as Unicredit in Commerzbank, with the Italian bank open to becoming a larger shareholder should additional shares be offered. At the present stage, however, the German government states that it is not going to proceed with a further sale of shares from the 12% it has in Commerzbank, while by law it cannot sell shares for the next quarter.

The information that Orcel exploited

The German government informed the public in the past few days of its intention to sell a stake in Commerzbank in order to send the message that the process would be fair, but also with the aim of demonstrating that the commitment he had made to divest the stake he had acquired in 2008 was being done.

However, this is how he informed the CEO of Unicredit Andrea Orcel, who he didn’t let the opportunity go to waste. Before selling the stake held by the German government, Orcel engaged in stock purchases through derivative contracts, according to information cited by foreign news agencies.

German officials had hoped that 9% of Commerzbank would end up with different investors, ensuring the bank’s independence. However, the warning messages were there, since UniCredit had made its intentions known to increase its holding in Commerzbank for years.

Unicredit’s efforts for Commerzbank

The first attempt goes back in 2001when Italy’s UniCredit made a move for Commerzbank, which it itself thwarted shortly before the 9/11 attacks.

The bank, based in Milan, processed one draft proposal in 2019which however met with political resistance. Another attempt made in 2022, by current CEO Andrea Orcel, also went nowhere due to the invasion of Ukraine.

And while Olaf Solz had no idea about the intentions of the Italian from Unicredit, the same did not happen with Meloni. Andrea Orcel had informed the Prime Minister of Italy in advance.

“The possibility of a merger is open”

In his statements on Thursday, the CEO of Unicredit, Andrea Orcel, left the possibility of a takeover or merger of Commerzbank is open.

“Everything is on the table,Orcel said on Bloomberg Television. We may buy the additional 12% owned by the German government, we may reduce our stake or we may merge the two banks. “Can all sides have a constructive discussion as to whether we all want to create something more than the value that Commerzbank can create alone” emphasized the Italian CEO.

Orcel’s statements gave new impetus to share prices, with Commerzbank shares up 2.6% and Unicredit up 2%.

“Defense Strategies”

Now the management of Commerzbank is considering defensive strategies in order to avoid the possibility of a takeover by the Italians. Despite the fact that it will participate in any exploratory discussions with Unicredit – based on the obligation it has to its shareholders – the management of the German banking group wants to maintain its autonomy.

It is noted that the German market represents 20% of Unicredit’s net profits, while a possible merger with Commerzbank would raise the figure to around 40%.