By John O’Donnell and Tom Sims
FRANKFURT (Reuters) – Commerzbank management discussed how to keep the German lender independent while exploring defensive strategies to resist a potential bid from UniCredit, a person familiar with the discussions said on Wednesday.
Although Commerzbank (ETR: ) is involved in discussions with UniCredit in line with its commitment to shareholders, the bank wants to maintain a stand-alone strategy, said two people, speaking on condition of anonymity because the discussions are private.
Commerzbank hastily called a board meeting and prepared it for a deal that would capture Commerzbank after UniCredit CEO Andrea Orsel surprised Berlin by moving unannounced to buy a 9% stake in the German lender.
Commerzbank’s resistance could complicate a bid to buy the bank, which finances many of the medium-sized companies that form the backbone of the German economy. Berlin still holds a 12% stake in the lender after bailing it out in the financial crisis.
Commerzbank declined to comment.
Earlier on Wednesday, UniCredit said it would seek regulatory approval to increase its ownership beyond 9.9%, while CEO Orcel approached Commerzbank to explore merger talks, one of the people told Reuters.
People said that this blunt approach was undesirable. Another person familiar with the discussions told Reuters that the German bank had also approached investment bank Goldman Sachs to advise on defense options.
The raid on Commerzbank has reignited speculation about consolidation in Europe’s fractured banking sector.
UniCredit’s share price has quadrupled since Orsel took over as CEO in April 2021, valuing it at 59 billion euros ($65 billion), much larger than Commerzbank’s 15 billion euros.
Germany is likely to pause any further equity sales after the withdrawal, a government source said, adding that the bank and government must now assess what the new situation is.
Union members also oppose the merger, fearing heavy job losses.
Frank Werneke, head of the German Verdi trade union, called on the government to stop any sales of shares to prevent a takeover of the bank.
Commerzbank shares rose 16.6% to 14.69 euros in Frankfurt, while UniCredit rose 0.2% in Milan.
Orsel’s gambit could also force other European banks, including Deutsche Bank, which declined to comment on Wednesday, to consider their strategic options.
German officials have said privately in the past that they were reluctant to allow a foreign bank to take over Commerzbank, fearing it would create an even stronger domestic competitor for Deutsche Bank.
Orcel previously approached Commerzbank CEO Manfred Knof about a potential deal in early 2022, before the Ukraine war, people with knowledge of the matter told Reuters.
($1 = 0.9076 euros)
