UniCredit announced on Wednesday that it has acquired 47.6 percent of Commerzbank shares, thus approaching control over the German lender. This purchase has been ongoing since 2024, despite opposition from the German government and the bank's management.
Next Steps and Obstacles
UniCredit's CEO, Andrea Orcel, who orchestrated this cross-border deal, must now decide whether to increase his stake above 50 percent. This would allow his bank to propose changes to the Frankfurt lender's board of directors or first attempt to reach a consensus, as he promised.
UniCredit has been present in Germany since 2005 through its Bavarian subsidiary HVB. However, the company may find it difficult to push through the takeover project due to deep-rooted resistance from the government, trade unions, and Commerzbank itself.
Positions of the Parties
The German Ministry of Finance renewed its criticism on Wednesday, labeling UniCredit's approach as 'aggressive and hostile' and unacceptable. Commerzbank, which retains a 12 percent shareholder stake following the 2009 bailout, opposed the deal but stated it was open to constructive dialogue with UniCredit, echoing statements made by the Milanese bank earlier on Wednesday.
Despite several rounds of informal meetings between Orcel and Commerzbank's Bettina Orlop, attempts to conduct substantive negotiations on the takeover offer have so far failed due to disagreements.
Expectations and Governance Challenges
UniCredit expects the European Central Bank to recognize it as controlling Commerzbank in accordance with German rules. Nevertheless, to appoint all shareholder representatives to Commerzbank's supervisory board, as Orcel suggested, it will require a majority ownership. Employee representatives hold half the seats on the board, and they do not approve of UniCredit's approach, according to Hans-Peter Burgof, head of the Banking and Financial Services department at the University of Hohenheim.
Burgof noted that although the chairman of the supervisory board, currently held by former Bundesbank head Jens Weidmann, carries double weight in case of parity, the bailout agreement reserves two seats for the government, creating difficulties for UniCredit.
To spur interest in Commerzbank, Orcel presented investors with his plans to increase the German lender's profitability. After gaining control, he intends to implement these plans within a couple of years while keeping Commerzbank separate from HVB.
