Germany’s finance minister criticizes UniCredit’s “very aggressive” bid for Commerzbank

Italian lender UniCredit“very aggressive, very opaque” application for Commerzbank was criticized by German Finance Minister Jörg Kukies, who stressed that hostile takeovers usually do not work.

“In government, we have to protect the safety and stability of the systemic banking sector,” Kukies told CNBC on Thursday at the World Economic Forum in Davos. “Hostile takeovers of systemic banks tend not to succeed.”

UniCredit now owns a direct 9.5% stake and an 18.5% stake through derivatives in Commerzbank after a surprise increase in its stake in September and after increasing its position.

Having a reliable CET1 ratio — an indicator of the bank’s strength and stability — 16.1% as of the third quarter, the Italian lender is seeking permission from the European Central Bank, which oversees the euro zone’s biggest lenders, to increase its stake in Commerzbank to 29.99%.

The sharp and accelerated pace of UniCredit’s pursuit has fueled market speculation that CEO Andrea Orzel – a Merrill Lynch mergers and acquisitions veteran – is ultimately targeting a cross-border consolidation.

The move by UniCredit, which already has a presence in Germany through its subsidiary HypoVereinsbank, has so far enjoyed a cool reception from the divided Berlin government, with outgoing Chancellor Olaf Scholz criticizing that “unfriendly attacks, hostile takeovers are not a good thing for banks. “

December’s rift in domestic politics and upcoming elections could prevent the German administration from keeping a close eye on the deal.

“In this particular case, the behavior of the potential buyer was very aggressive, very opaque, opaque,” Kukis told CNBC’s Karen Tso and Steve Sedgwick. “Hostile takeovers are not very good in systemic banks. So it’s all about the specifics of this case, it’s not a general statement that Germany is not open for business for global investors.”

CNBC has reached out to UniCredit for comment.

In a conversation with CNBC back in Novemberjust a few months after the unexpected acquisition of the share, Orcel noted: “Let’s put it this way: we wouldn’t be here if we hadn’t been invited to buy this share. And everything started as we thought constructive. “

Questions have been raised about the Italian banking group’s commitment to the deal, while launching an ambitious formal takeover bid for Italian counterpart Banco BPM. at the end of November.

For its part, Commerzbank defended its case independently, and a member of the board warned about significant job losses as a result of integration, if the two banks were to merge.

Appetite for cross-border consolidation in Europe has waned somewhat since the controversial 2007 takeover and subsequent break-up of Dutch lender ABN Amro by a consortium led by Royal Bank of Scotland, which ultimately led to the collapse of the banks during the financial crisis. UniCredit’s Orcel, then a senior investment banker at Merrily Lynch, advised on the deal.

However, analysts describe banking consolidation in the region – and Germany in particular – as “long overdueCommerzbank was previously targeted for a takeover by the country’s largest lender, Deutsche Bank, before the initial negotiations broke down in 2019.

“The claim that there is no consolidation and no change in the German banking sector is completely wrong,” Kukies said on Thursday.

UniCredit and Commerzbank are due to release their fourth-quarter results on February 10 and February 13, respectively.