Again the same scenario, again the same “surprise” tactic: with new moves the Italian bank UniCredit increased to 28% the stake it holds in Commerzbank, Germany’s second largest bank. In September the Italians had announced the purchase of a 9% stake, but they did not stop there and, through movements on the Stock Exchange, began to widen their stake to reach 21% at the end of September and 28% today.

There have been somewhat contradictory statements from UniCredit management in Milan about whether or not a takeover of Commerzbank is imminent. After the latest developments, a representative of the Italian bank suggests that this is an investment move, and not a takeover attempt. However, the German News Agency (dpa) observes that the scenario of the Italians submitting an official takeover proposal is now becoming more likely. Based on the current law, they are obliged to do so anyway, in case their share reaches 30%.

Negative reaction from Berlin

A representative of Commerzbank, responding to a question about the new investment move by the Italians, states that “we are recording it and from then on we are focusing on the further development of our strategy, which we will announce on February 13”. So business as usual?

The German government remains in the negative position it had already expressed since September. “Once again the Italian bank operates without consultation, with unfriendly methods” says a government spokesman in Berlin. At the same time, he recalls that UniCredit had pledged not to proceed with further moves before the early elections in Germany, scheduled for February, and that unfriendly takeovers have no place in the banking industry, especially “when it comes to a systemic bank”.

Even German Chancellor Olaf Scholz intervened in the case in September, who spoke of an “unfriendly attack” by the Italians. At the same time, however, government spokesman Steffen Hempstreit hinted that Berlin would not be able to block a potential takeover by interfering with free market processes.

Commerzbank’s first female CEO, Bettina Orlop, who only took office on October 1, seems to be keeping her distance from a possible merger and is talking about a “exclusively investment movement” of the Italians. The fact is, however, that, if it wishes, UniCredit has the necessary funds to absorb Commerzbank, as its value on the Stock Exchange is more than three times that of the German credit institution (63 billion euros against 18.7 billion).

Fears of mass layoffs

The head of the Italian group, Andrea Orcell, has repeatedly said that he sees “huge potential” in the event of a merger of the two credit institutions. For its part, Verdi, Germany’s largest union, is expressing concerns about mass redundancies at the German bank, which currently employs 42,000 workers. After all, there is a precedent. In 2005 the Italians had absorbed the also German HypoVereinsbank, which at that time employed 26,000 workers and today has only 9,500.

Now the Verdi union is demanding that the German government include Commerzbank in the “critical infrastructure” of the country, such as public services and energy companies, which are protected by special legislation from aggressive takeover moves. In addition, the union emphasizes, Commerzbank has a critical role in financing small and medium-sized enterprises, which are the backbone of the German economy.