UniCredit's Strategic Moves Stirs Controversy with Commerzbank Investment

Italy's UniCredit, under CEO Andrea Orcel, has stirred controversy by increasing its stake in Germany's Commerzbank to nearly 21% using derivative instruments. This move, conditional on ECB approval, was criticized by Chancellor Olaf Scholz. UniCredit views Commerzbank as a valuable investment and could consider a future deal if conditions are right.

Italy's UniCredit, led by CEO Andrea Orcel, will only pursue a deal with Commerzbank if it gains support from all stakeholders and the conditions are favorable, Orcel said on Wednesday. The bank may instead sell its holding, which has angered the German government after UniCredit increased its stake in Commerzbank to nearly 21% using derivative instruments. Chancellor Olaf Scholz labeled the move as 'an unfriendly attack.'

Orcel emphasized at a Bank of America investor conference in London that 'Commerzbank, for us at the moment, is an investment, nothing else. There is no offer, there is no bid.' Orcel elaborated that UniCredit, now a strategic shareholder, views Commerzbank as a valuable investment. He stated that a tie-up would be beneficial, but UniCredit's financial derivatives contracts limit any potential losses.

However, Orcel made it clear that a forced merger at unfavorable terms is not an option. Commerzbank's shares have surged since Orcel's increase in stake, fueling investor speculation of a full takeover bid by UniCredit. The Italian bank outbid rivals for a 4.5% holding from the German government and now holds an 11.5% stake, pending European Central Bank approval. Orcel noted that any deal requires broad support, stating, 'It doesn't meet our metrics? We won't do it.'

(With inputs from agencies.)