Commerzbank snubs overtures for UniCredit takeover

By Tom Sims and John O’Donnell

BERLIN (Reuters) -The chief executive of Germany’s Commerzbank (ETR:) snubbed overtures for a takeover by Italy’s UniCredit, saying on Monday he had his own plans for the bank and hoped it could stay independent.

UniCredit, Italy’s second-largest bank, recently snapped up a stake of 9% in Commerzbank, catching several German government officials off guard, who sold down the state’s holding without realising UniCredit would pounce, according to people familiar with the matter.

“We are naturally convinced about our own plans,” Commerzbank CEO Manfred Knof told reporters, confirming, when asked, that he still wanted the bank to remain independent.

“We are all working with maximum energy and power on the implementation of our plan and strategy,” he said, outlining the bank’s first official response to suggestions it be taken over by the larger Italian lender.

Earlier on Monday, UniCredit CEO Andrea Orcel told a German newspaper that a merger of the two banks could add value and create a stronger bank.

But Knof said Commerzbank was already prospering, and that management had laid out its position to its biggest shareholder, the German government, on the importance of a strong Commerzbank for the country’s standing as a financial centre.

He added nonetheless that management would look at any proposals from UniCredit in line with their obligations to stakeholders.

Commerzbank, with more than 25,000 business customers, almost a third of German foreign trade payments and more than 42,000 staff, is a linchpin of the German economy, Europe’s industrial motor.

Although UniCredit has for many years eyed its smaller German rival, the late-night raid to take part of the government’s stake irritated German government officials, people with knowledge of the matter said.

It was equally unwelcome at the bank, where management and trade unions fear a cull of jobs. Management prepared to defend itself from the bid, appointing bankers to advise them how.

The discussions about a takeover are unfolding at a delicate time in Germany. The coalition government, one of the most unpopular in recent history, is preparing for national elections next year.

Strong recent gains for the far-right and far-left are squeezing the three-party government and, in particular, the smallest member of that coalition, the liberal FDP party, which runs the finance ministry, responsible for the stake sale.