It all started when the German government, which had rescued her Commerzbank with taxpayers’ money in the 2008/9 crisis, decided to divest a stake in the bank, reducing the state’s stake to 12%. Last Wednesday it became known that the Italian bank UniCredit bought a stake of around 4.5% of Commerzbank, paying an amount of 700 million euros. It was clearly the best deal.

But the Italians did not limit themselves to this, but bought “secretly” through him Stock Exchange an additional 4.5% stake, resulting in today holding 9% of Germany’s second largest bank. But even that is not enough for them. Now the head of UniCredit, Andrea Orsel, tells Bloomberg that he is “looking into” the possibility of a takeover of the German bank. At the same time, it will seek the approval of the European Central Bank (ECB) to increase, in due course, its stake in Commerzbank, acquiring a stake of more than 10%.

It is assumed that the Italians (who have recently been active in Greece as well) have a “piggy bank” of ten billion euros for acquisitions. In any case, however, according to the applicable takeover provisions, Berlin is not allowed to sell any more Commerzbank securities within the next three months.

“Surprise” in Germany

The tactic followed by UniCredit is said to have surprised experts, as well as the German government. The Verdi trade union, which operates in the service sector, is calling on Berlin to reject a possible merger and not to grant a new “package” of shares. Today, Commerzbank is one of the largest lenders to small and medium-sized enterprises, which form the “backbone” of the German economy.

Some believe that the merger would intensify, to an undesirable degree, competition with the Deutsche BankGermany’s largest credit institution. It is recalled that in 2019 Deutsche Bank had investigated the possibility of acquiring Commerzbank and this in fact at a time when Commerzbank had been downgraded from the Frankfurt DAX index to the “second category” of the MDax. However, the banking “elephant marriage” did not proceed at the time, with experts citing different corporate cultures, but also high restructuring costs after the merger.

According to Reuters, Commerzbank executives held an emergency meeting on Wednesday night, looking for ways to keep the bank “independent” and calling on the expertise of Goldman Sachs. However, German government sources tell Reuters that Berlin is not “by definition opposed” to a possible merger and considers that this case concerns only the two banks.

The “giant” UniCredit

UniCredit, based in Milan, was created in 1998 after the merger of numerous Italian banks, including UniCredito and Credito Italiano. It has since expanded to other European countries. Today it is the 34th largest bank in the world, while its head, Andrea Orcell, is considered the “master” of mergers, in which he often follows aggressive tactics. He had spearheaded the creation of UniCredito, and later initiated a similar merger in Spain, creating the BBVA group and helping Banco Santander absorb Britain’s Abbey National.

In 2018, Orsel was going to take over as CEO of Banco Santander, but the deal fell apart at the last minute, because the bank could not meet his financial demands. The Italian banker did not hesitate to sue the bank and was vindicated, collecting compensation of 68 million euros.

Edited by: Yiannis Papadimitriou