UniCredit secures 48% of Commerzbank shares, nearing control
UniCredit's Acquisition Efforts and Challenges
By Valentina Za and Tom Sims
MILAN, July 8 (Reuters) - UniCredit said on Wednesday it had secured 47.6% of the shares of Commerzbank, leaving the Italian bank just short of gaining control of the German lender it has been trying to buy since 2024.
Decisions Facing UniCredit Leadership
UniCredit CEO Andrea Orcel, architect of the cross-border deal, must now decide if he wants to lift the stake above 50%, which would allow his bank to propose board changes at Commerzbank, or attempt to first build consensus as he had pledged to do.
Historical Presence and Obstacles in Germany
Present in Germany since 2005 through its Bavarian unit HVB, UniCredit could struggle to advance its takeover project in the face of deep-seated hostility from the government, unions and Commerzbank itself.
Government and Union Resistance
Germany's finance ministry renewed its criticism of UniCredit on Wednesday, calling its "aggressive and hostile approach" unacceptable. The federal government still holds 12% of Commerzbank following a 2009 bailout.
Frankfurt-based Commerzbank has opposed the takeover bid but said it remained open to constructive dialogue with UniCredit, echoing similar comments by the Milanese bank earlier on Wednesday.
Orcel and his Commerzbank counterpart Bettina Orlopp have held several rounds of short-lived informal talks, but attempts to hold substantive negotiations over the takeover bid have so far failed due to disagreements.
A Looming Fight for Control of Commerzbank's Board
UniCredit now expects the European Central Bank to declare it to be in control of Commerzbank under German rules.
It would, however, need majority ownership in order to name all shareholder representatives on Commerzbank's supervisory board, as Orcel has suggested it may seek to do.
Workers' representatives hold half the seats on the board and they dislike UniCredit's approach, said Hans-Peter Burghof, chair of banking and financial services at the University of Hohenheim.
Making life more difficult for UniCredit, the bailout contract also reserves two seats for the government, Burghof said. The head of the supervisory board, a role currently held by former Bundesbank chief Jens Weidmann, meanwhile counts for double if the board is evenly split.
Angering Commerzbank, Orcel has laid out to investors his plans to boost the German lender's profits which, once in control, he would implement over a couple of years while keeping Commerzbank separate from HVB.
UniCredit, Commerzbank Clash Over Tender Take-Up Data
Having built a 26.7% stake in the rival lender since September 2024, UniCredit launched a low-ball tender offer in May. It said at the time it was not seeking control but wanted to nudge its stake above 30%, which would free it to buy more shares on the market without triggering a mandatory buyout.
Take-up of the offer totalled 17.6%, UniCredit said. That is up from 12.5% before a two-week extension of the tender period dictated by German takeover laws.
The two banks have sparred over the take-up data, however, with the German lender saying shares had been tendered mostly by investment banks that were counterparties in swap contracts UniCredit had entered on Commerzbank shares.
"The offer had some critical aspects that may lead to legal haggling afterwards," Burghof said.
Less than 2% of institutional and retail shareholders have tendered their shares as part of UniCredit's offer, Commerzbank said on Wednesday, adding that was "clear evidence of the low attractiveness" of the offer.
"The tendered shares originate predominantly from banks and parties connected to UniCredit," it said.
Voting Rights and Control Thresholds
When excluding treasury shares, which carry no voting rights, UniCredit has a 49.7% voting stake in Commerzbank, well above the threshold of around 40% which generally entails a position of control under German corporate rules.
Being declared in control without majority ownership would force UniCredit to consolidate a minority stake, in a major blow to its capital reserves due to rules on the accounting of minorities.
Potential Next Steps for UniCredit
UniCredit could opt to amend swap contracts it owns, which currently can only be settled in cash and not shares, handing it a further 11.5% of Commerzbank.
The stake it declared on Wednesday includes a 3.2% holding built via share-settled derivatives.
(Reporting by Valentina Za; Editing by Cristina Carlevaro, Keith Weir, Joe Bavier and Catherine Evans)
