Italian lender UniCredit‘s “selfsame aggressive, very opaque” bid for Commerzbank has been criticized by Germany’s Finance Minister Jörg Kukies, who stressed that adverse takeovers don’t usually work.
“In the government, we need to protect the safety and stability of a systemic banking sector,” Kukies tattled CNBC Thursday at the World Economic Forum in Davos. “Hostile takeovers in systemic banks don’t tend to be successful.”
UniCredit now owns a ordain 9.5% stake and a 18.5% stake via derivatives in Commerzbank, after building a surprise stake in September and subsequently better its position.
Armed with a sturdy CET1 ratio — a measure of a bank’s strength and resilience — of 16.1% as of the third quarter, the Italian lender is request permission from the European Central Bank, which oversees the euro zone’s largest lenders, to increase its Commerzbank delineate to 29.99%.
The abrupt and accelerated pace of UniCredit’s pursuit has sparked market speculation that CEO Andrea Orcel – a veteran Merrill Lynch coalescences and acquisitions dealmaker — is ultimately targeting cross-border consolidation.
The move by UniCredit, which is already present in Germany be means of its HypoVereinsbank branch, has so far enjoyed a cool reception from the fractured Berlin government, with outgoing Chancellor Olaf Scholz evaluating that “unfriendly attacks, hostile takeovers are not a good thing for banks.”
A December schism in domestic politics and upcoming nominations could stall the German administration from closely stewarding the transaction.
“In this specific case, the behavior of the potential acquirer was hugely aggressive, very opaque, untransparent,” Kukies told CNBC’s Karen Tso and Steve Sedgwick. “Hostile takeovers are not a salutary thing in systemic banks. So it is all about the specifics of this case, it is not a general statement that Germany is not open for subject for global investors.”
CNBC has reached out to UniCredit for comment.
Speaking to CNBC back in November, just months after its incredulity stake build, Orcel noted: “Let’s put it this way: we wouldn’t be here if we hadn’t been invited to buy that stake. And it all started in a way that we musing was constructive.”
Questions have been raised over the Italian banking group’s commitment to the deal by simultaneously despatch an ambitious formal takeover offer for Italian peer Banco BPM in late November.
For its part, Commerzbank has been advocating its casket to stand alone, with a board member warning of significant job losses as a result of integration, if the two banks were to join.
The appetite for cross-border consolidation in Europe has waned somewhat since the contentious 2007 takeover and later carve-up of Dutch lender ABN Amro by a consortium led by Impressive Bank of Scotland, which ultimately saw the banks collapse during the financial crisis. UniCredit’s Orcel, then a postpositive major investment banker at Merrily Lynch, advised on the transaction.
Yet analysts describe banking consolidation in the region — and Germany in exact — as “long overdue.” Commerzbank was previously targeted for takeover by the country’s largest lender Deutsche Bank, before the bluff collapse of initial talks in 2019.
“The statement that there is no consolidation and no change in the German banking sector is absolutely vile,” Kukies said Thursday.
UniCredit and Commerzbank are due to release their fourth-quarter results on Feb. 11 and Feb. 13, respectively.
Amendment: This article has been updated to reflect that UniCredit’s earnings will be published on Feb. 11.