Commerzbank CEO Bettina Orlopp is expected to hold video talks with UniCredit executives in early August as the Italian lender closes in on control of its German rival. UniCredit's stake is set to reach just under 50%, and a full acquisition would be Europe's largest banking deal in roughly two decades.
Bloomberg reported that Commerzbank CEO Bettina Orlopp is set to hold video talks with UniCredit executives in early August, as the Italian lender moves closer to securing control of its German rival. The conference is planned shortly after Commerzbank publishes its second-quarter results and could open negotiations over the bank's future structure and management. The discussions may continue for several months.
UniCredit's stake closes in on 50%
UniCredit has obtained almost 18% of Commerzbank's shares through a tender offer that carried virtually no premium. Add in derivatives and the effect of a Commerzbank share buyback, and the Italian bank's position is expected to reach just under 50%.
That holding could give UniCredit a majority at shareholder meetings, where not every investor votes, letting CEO Andrea Orcel push for management and strategic changes. Commerzbank counters that UniCredit would need 75% support to carry out many significant changes, particularly if minority shareholders, employees and management oppose its plans.
Orlopp pushes for a friendly deal
Orlopp said she expects the two sides to reach a friendly agreement. Her priorities include protecting Commerzbank's international operations, preserving its separate stock-market listing, and safeguarding shareholders who did not accept UniCredit's offer.
Orcel is expected to seek €1.4 billion in cost savings, including reductions across Commerzbank's international network and back-office operations. Commerzbank has separately outlined about 3,000 job cuts as part of a plan to double profit by 2030.
Berlin softens its resistance
The German government, which owns more than 12% of Commerzbank, continues to back Orlopp alongside employee representatives. Berlin had previously opposed a takeover but has recently adopted a less resistant position, Bloomberg reported.
A full acquisition would be Europe's largest banking transaction in roughly two decades. It would expand UniCredit's footprint in Germany and Poland and advance the consolidation of Europe's fragmented banking sector. UniCredit plans to operate Commerzbank independently for at least two years before considering a combination with its German unit, HVB.
Source: Investing.com
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