(Alliance News) – The German government is reportedly weighing new options to thwart UniCredit’s takeover bid for Commerzbank as political tensions mount over the deal spearheaded by CEO Andrea Orcel.
According to Reuters, some members of the Berlin executive are examining the possibility of increasing the state’s stake in the German lender through KfW, the state-owned development bank, in an attempt to build a position large enough to prevent a full takeover.
Germany already holds approximately 12% of Commerzbank, a legacy of the bailout conducted during the global financial crisis. The proposal under consideration involves further increasing this holding to establish a blocking minority.
According to Reuters, the discussions reflect the German government’s growing concern over Commerzbank’s strategic role in financing the Mittelstand, the network of small and medium-sized enterprises considered a pillar of the German economy.
‘A possible KfW participation should certainly be taken into consideration’, Armand Zorn, a prominent member of the German Social Democratic Party and deputy chairman of the SPD group in the Bundestag, told Reuters.
‘It should be seen as a last resort if all other options fail… The impact would go far beyond the symbolic’, Zorn added.
UniCredit has been targeting Commerzbank since 2024 and has progressively built a stake close to 30%, while Chancellor Friedrich Merz and Commerzbank CEO Bettina Orlopp have repeatedly expressed their opposition to the transaction.
‘The government should continue to signal that a hostile takeover of Commerzbank is not in the interest of the German financial center’, Zorn further told Reuters, adding that ‘Commerzbank plays a central role in Germany’s economic resilience’.
Reuters highlights that any increase in the public stake would require several billion euros and could face political resistance within the governing coalition, particularly from the more market-oriented Christian Democrats.
The deal has meanwhile become a political test for Berlin, after the government repeatedly called on UniCredit to abandon its pursuit without, so far, managing to halt Orcel’s initiative.
Some of Commerzbank’s long-standing clients have also spoken out against the deal. ‘I view an acquisition very critically and do not see the benefits’, Juergen Lindhorst, chairman of the Lindhorst Group, told Reuters.
According to Reuters, the stake currently held by the German government is worth over EUR4.5 billion. Raising it to 25% to obtain a blocking minority could cost at least as much again, without necessarily guaranteeing a definitive end to UniCredit’s move.
UniCredit shares were up 3.9% at EUR70.49 per share.
By Antonio Di Giorgio, Alliance News reporter
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