- The country’s officials have reportedly urged BaFin to block the acquisition.
- Mistrust of UniCredit’s CEO has exacerbated the concerns.
Germany raised concerns over a possible takeover of Commerzbank by Italy’s UniCredit, Reuters reported. The possibility of linking German financial stability to Italy’s debt-laden economy has reportedly pushed Berlin to act.
The matter involves UniCredit’s unexpected purchase of a significant stake in Commerzbank, which is partially owned by the German government. This step has led Berlin to prepare for a hostile takeover, fearing it could drag Germany into Italy’s financial problems. UniCredit has massive holdings in Italian government bonds, which Germany perceives as a risk to financial stability if the two banks were to merge.
UniCredit currently owns roughly 9.9% of Commerzbank and has expressed interest in increasing its stake to nearly 30%. This could potentially lead to a full merger, a scenario that Berlin views with growing concern.
While UniCredit has been vocal about its desire to create a pan-European banking giant, German officials worry about the implications of joining forces with a country whose debt significantly outweighs its economic output.
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BaFin’s Role
Now, the German government is lobbying BaFin, the country’s financial watchdog, to investigate the deal. According to sources cited by Reuters, Germany is pressing for BaFin to recommend blocking the acquisition to the European Central Bank (ECB), which holds the final say on such mergers.
However, the final decision rests with the ECB, which has historically supported cross-border bank mergers as a means of strengthening Europe’s financial system. ECB officials have stressed the importance of creating larger banks that can compete on a global scale, particularly with their US counterparts.
Berlin’s skepticism is also fueled by a lack of trust in UniCredit’s CEO, Andrea Orcel. Sources familiar with the situation suggest that confidence between the German government and Orcel has eroded, particularly after his surprise move to acquire more shares in Commerzbank using derivatives. While Rome cautiously supports UniCredit’s move, Berlin hopes that its efforts will at least delay the ECB’s approval.
