Commerzbank Slams UniCredit's 'Hostile' Takeover Bid

FRANKFURT (Reuters) - Commerzbank on Wednesday labeled UniCredit's approach to a potential takeover as "hostile" and "unilateral," as the Italian lender continues to build its stake in the German bank without prior discussion or agreement.

UniCredit has been amassing a significant stake in Commerzbank, most recently announcing a 21% holding, which has angered the German government and sparked political opposition to a cross-border tie-up. The Italian bank has used derivatives and financial instruments to build its position, allowing it to circumvent the usual takeover process and amass a large stake without the target company's knowledge or consent.

Commerzbank has expressed its willingness to engage in discussions with UniCredit, but only if a specific proposal is presented. The German bank's management has stated that any talks could only be based on a specific proposal and that UniCredit's approach has unnecessarily antagonized many stakeholders at its end.

UniCredit CEO Andrea Orcel has acknowledged that there have been no discussions with Commerzbank or the German government regarding a potential takeover, but he has expressed his hope to be able to sit down with the future government formed after the Feb. 23 election to discuss a Commerzbank tie-up with HVB, the Bavarian bank UniCredit bought in 2005.

The Italian bank's latest move comes after Berlin said it would no longer sell down its remaining 12% holding in Commerzbank as planned, a response to mounting domestic opposition to a takeover. Although UniCredit needs approval from the European Central Bank to lift its holding above 10%, it has acquired the 11.5% stake in such a way that the trade will not settle until "the required approvals have been obtained."

German Chancellor Olaf Scholz has come out against a UniCredit takeover of Commerzbank, stating that "unfriendly attacks [and] hostile takeovers are not a good thing for banks and that is why the German government has clearly positioned itself." UniCredit's interest in Commerzbank has raised hackles in Germany, amid accusations that the German government had been caught napping.

In response to UniCredit's latest stake-building and Berlin's terse response, a government official said that Berlin "supports the strategy of Commerzbank which is geared towards independence," stressing that "we do not support a takeover, and we have informed UniCredit about this."

UniCredit's use of derivatives and financial instruments to build its stake in Commerzbank has significantly altered the dynamics of the takeover situation, as it has allowed the Italian bank to amass a substantial position in the German lender without triggering immediate regulatory scrutiny or public disclosure. This approach has raised concerns about a potential hostile takeover of Commerzbank and has led to a tense standoff between the two banks and their respective governments.

The implications of UniCredit's approach include the potential for a hostile takeover, job cuts, strategic changes, and geopolitical tensions, which could shape the future of the two banks and their relationship with each other and their respective governments. As the situation continues to unfold, investors and stakeholders will be closely watching the developments between Commerzbank and UniCredit.