UniCredit's Bold Move Stirs Commerzbank Controversy

German government officials and UniCredit bankers have engaged in talks following the Italian lender's acquisition of a 9% stake in Commerzbank. The move was met with resistance from Commerzbank's management and employees. UniCredit's CEO has not ruled out future acquisitions, creating significant tensions in the German banking sector.

German government officials and UniCredit bankers have engaged in discussions after the Italian financial institution acquired a 9% stake in Commerzbank, according to a government source on Friday.

This exclusive report by Reuters signals a notable shift as one of Germany's largest banks might come under partial foreign ownership. Earlier this week, UniCredit, Italy's second-largest bank, acquired the stake unexpectedly. The acquisition caught German authorities off guard and faced opposition from Commerzbank's local management, who are keen on maintaining independence.

A German government representative emphasized that the decision ultimately lies with the banks involved, although the administration is not opposed to a potential merger. However, the strong opposition from Commerzbank's workforce cannot be ignored. A finance ministry spokesperson declined to validate the talks. UniCredit CEO Andrea Orcel has maintained that all strategic options remain viable, including scaling down the newly acquired stake if necessary.

Orcel has expressed a willingness to engage with all stakeholders to evaluate the feasibility of a larger acquisition, signaling potential interest in purchasing more of the government's Commerzbank shares should they be made available. His move to acquire shares before a government sale has agitated officials in Berlin and remains unwelcome at Commerzbank's headquarters in Frankfurt.

Trade unions are also wary of potential job losses tied to any possible mega-merger. Frank Werneke, head of the German Verdi labor union, urged the government to stop selling any more shares to block a takeover. Commerzbank, partially state-owned following a bailout during the 2008 financial crisis, serves as a pivotal lender to Germany's Mittelstand enterprises, which form the backbone of the national economy.

(With inputs from agencies.)