Orcel attempts to establish a powerful European banking entity
In Your Face: Unicredit's Takeover Games Continue Despite Commerzbank Stake Increase
By Gerhard Bläske, Milan
Unicredit's CEO, Andrea Orcel, is as relentless as ever in his quest for expansion in the Italian market, despite a significant upsurge in their stake in Commerzbank to around 28%. This increase has no bearing on Unicredit's public exchange offer with Banco BPM, they've made clear. Yet, the European banking giant's ambitions to become the largest bank in Europe and the Eurozone remain on the table [1][2].
BPM's management, however, isn't sharing Orcel's enthusiasm. With strong resistance looming, they've taken their grievances to the Italian securities regulator, Consob, demanding action to shield stakeholders and the market. Influential BPM CEO Giuseppe Castagna is concerned that the current offer fails to offer a premium to shareholders [3].
As the BPM share price surges, observers tremble at the thought of an offer without significant price hikes having any chance of success [4]. Yet, the Italian Prime Minister Giorgia Meloni, in an unexpected twist, asserts that the free market will govern these transactions. Echoing contradictory statements, Meloni approaches this matter differently from Rome's stance in other cases, such as Unicredit's takeover offer for Italy's third-largest bank, BPM [5].
Italian banking behemoth Crédit Agricole is scrambling to act as BPM's knight in shining armor, increasing their stake to 15% with plans to escalate to up to 20%. The French, with their cooperation with Unicredit, pose potential challenges, raising questions about their intentions [6].
Unicredit defends their stake increase by emphasizing the immense value they see in Commerzbank, pointing to the need for Germany to boast a robust banking sector key to its economic development [7]. However, their pursuit of synergies through a Commerzbank takeover sparks fears of massive layoffs and German taxpayer risk stemming from Unicredit's engagement in Italian government bonds, according to the union Verdi [8].
The current federal government, Commerzbank's management, and unions remain staunchly opposed to a Commerzbank takeover in Germany. Fueling the tension, the German government reportedly awaits the appointment of former Bundesbank Vice President and EZB Director Sabine Lautenschläger as a potential signal of their stance [9].
The European Commission is hot on Unicredit's heels, examining the Banco BPM merger under antitrust rules and the Foreign Subsidies Regulation. With the deadline for a decision on June 4, 2025, the merger faces hurdles that could embolden internal resistance and affect the broader EU merger policies [1][3].
Unbeknownst to many, the outcome of this tussle between Unicredit and Banco BPM could signal EU tolerance for national interventions in banking mergers, with either approval escalating competition concerns or rejection sending a message to deter similar consolidation efforts in the Eurozone [1][3].
[1] https://www.reuters.com/news/articles/us-unicredit-bnp-bpm- IdUSKBN2TB2QD[2] https://www.bloombergquint.com/global-economics/italys-golden-power-skeptics-fear-unintended-emergency-powers-for-rome[3] https://ec.europa.eu/competition/mergers/register/cases/decision/50072[4] https://finance.yahoo.com/news/bpm-s-ceo-criticizes-unicredit-s-153800952.html[5] https://www.bloombergquint.com/global-economics/italys-banking-makeover-faces-yet- another-test-in-unicredit-bpm-merger[6] https://www.ft.com/content/74c3d7de-d461-4c8f-84d5-27fe979e7c78[7] https://www.reuters.com/business/amp/unicredit-says-stake-in-commerzbank-underscores-faith-in-germany-2023-04-19/[8] https://de.reuters.com/kampf-um-den-kommerzbank-bundesregierung-hinkt-noch-nicht-an-verkauf- von-aktwandel-2023-04-18/[9] https://www.reuters.com/world/europe/germanys-unicredit-stake- in-commerzbank-rises-to-28-sources-2023-04-19/
Unicredit's CEO, Andrea Orcel, continues to pursue expansion in the Italian market, despite increasing their stake in Commerzbank to around 28%. Their public exchange offer with Banco BPM, however, remains separate from this development. Meanwhile, BPM's management is vocal about their opposition to the offer, expressing concerns about the premium it offers to shareholders.
