Italian lender UniCredit“very aggressive, very opaque” offer for Commerzbank was criticized by German Finance Minister Jörg Kukies, who emphasized that hostile takeovers usually do not work.
“In government, we must protect the security and stability of the systemic banking sector,” Kukies told CNBC on Thursday at the World Economic Forum in Davos. “Hostile takeovers at systemically important banks are usually not successful.”
UniCredit currently owns 9.5% directly and 18.5% via derivatives in Commerzbank, after building a surprise stake in September and subsequently increasing its position.
Equipped with a solid CET1 ratio – a measure of a bank's strength and resilience – from 16.1% since the third quarter, the Italian lender has been seeking consent from the European Central Bank, which supervises the largest lenders in the euro zone, to increase its shares in Commerzbank to 29.99%.
The rapid and accelerated pace of UniCredit's pursuit has sparked market speculation that CEO Andrea Orcel – a seasoned Merrill Lynch M&A broker – will eventually set his sights on cross-border consolidation.
The move by UniCredit, which already has a presence in Germany through its HypoVereinsbank unit, has so far been met with a lukewarm reception from the divided government in Berlin, with outgoing Chancellor Olaf Scholz criticizing that “unfriendly attacks and hostile takeovers are not a good thing for banks.” “
December's domestic political schism and upcoming elections could hamper the German administration's ability to closely manage the deal.
“In this particular case, the behavior of the potential buyer was very aggressive, very opaque and opaque,” Kukies told CNBC's Karen Tso and Steve Sedgwick. “Hostile takeovers are not a good thing in systemic banks. So it's about the specificity of this case, it's not a general statement that Germany is not open to business for global investors.”
CNBC reached out to UniCredit for comment.
I spoke to CNBC in Novemberjust a few months after the surprise stake build, Orcel noted: “Let's put it this way: we wouldn't be here if we hadn't been invited to buy this stake. And it all started in a way that we thought was constructive. “
Questions have been raised about the involvement of the Italian banking group in the transaction by simultaneously presenting an ambitious formal offer to take over the Italian counterpart of Banco BPM at the end of November.
For its part, Commerzbank argued for handling its case on its own and received a warning from a member of the board of directors significant job loss as a result of integration if both banks were to merge.
The appetite for cross-border consolidation in Europe has waned somewhat since the controversial 2007 takeover and subsequent split of Dutch lender ABN Amro by a consortium led by Royal Bank of Scotland, which ultimately led to the collapse of banks during the financial crisis. UniCredit's Orcel, who was then a senior investment banker at Merrily Lynch, advised on the transaction.
However, analysts describe banking consolidation in the region – and in Germany in particular – as “long overdueCommerzbank was previously a takeover target by the country's largest lender Deutsche Bank, before the exploratory talks collapsed in 2019.
“The statement that there is no consolidation and no changes in the German banking sector is completely wrong,” Kukies said on Thursday.
UniCredit and Commerzbank are scheduled to release fourth-quarter results on February 11 and 13, respectively.
Correction: This article has been updated to reflect the fact that Unicredit earnings will be released on February 11.