(Bloomberg) -- German Finance Minister Christian Lindner criticized the way UniCredit Spa amassed a stake in Commerzbank AG, highlighting the government’s irritation at the Italian lender’s surprise move.
“The style of the UniCredit approach has unsettled many shareholders” and that “is why the German government has decided not to sell any further shares,” Lindner said Tuesday during an event at his ministry in Berlin. He was referring to an announcement on Friday that Germany will hold on to its remaining stake in Commerzbank for now.
UniCredit has rapidly built up a big stake in Commerzbank, which serves as an important source of funding for German companies. The move wrongfooted Berlin, which in early September had announced the decision to sell down a holding it has owned since it bailed out the lender more than a decade ago.
German officials expected a multitude of financial investors to buy its shares in the sale, Bloomberg has reported. Instead, UniCredit swooped in and bought the entire package of 4.5% that was made available, adding it to a stake of the same size it had quietly acquired ahead of the placement.
UniCredit Chief Executive Officer Andrea Orcel followed up on Monday, revealing UniCredit now effectively holds 21% of Commerzbank, largely through derivatives. That would make it the largest shareholder in the lender ahead of the German government.
The way the Italian lender built its position in Germany’s second-biggest bank has triggered resistance to a possible takeover from Chancellor Olaf Scholz’s ruling coalition. The move “has raised questions,” Lindner added on Tuesday.
The strong opposition from the German government in turn has triggered annoyance in Italy, with officials privately saying it’s unreasonable for Berlin to advocate for more European integration, and then come out against a possible takeover of Frankfurt-based Commerzbank, Bloomberg has reported.
Lindner reiterated in his remarks Tuesday that the government is committed to shedding its remaining 12% Commerzbank holding over the longer term.
“The federal government has always made it clear that Commerzbank must be privatized,” Lindner told reporters. “There are public policy reasons for this: the state cannot be a shareholder in a competitive institution in the long term.”
Asked if the government wants to prevent UniCredit from swallowing Commerzbank, he said it’s a matter for the lender’s management and supervisory boards.
The bank’s influential labor representatives have made clear they oppose any move for UniCredit, warning that two-thirds of the jobs at the German lender could be cut in a takeover.
At a rally outside Commerzbank’s Frankfurt headquarters on Tuesday, supervisory board member Stefan Wittmann from trade union Verdi said that Berlin should keep its remaining Commerzbank stake and take its time to scrutinize a potential deal as carefully as possible.
He also said other investors could step in. “There are other investors who want to help us keep our independence,” Wittmann said. “And our federal government can of course play a creative role in this.”
Germany’s conservative opposition has criticized the government’s handling of the sale, calling it “amateurish” and “a disaster for the German banking sector.”
The CDU/CSU alliance has insisted on adding a debate on the transaction to the lower house of parliament’s agenda on Wednesday entitled “Clarification of the events surrounding the sale of the government’s Commerzbank shares.”
(Adds context throughout.)
©2024 Bloomberg L.P.
