Exclusive-Commerzbank readies talks with UniCredit, seeking to stay independent

By John O’Donnell and Tom Sims

FRANKFURT (Reuters) -Commerzbank is poised to put CFO Bettina Orlopp in charge of talks with UniCredit when the German bank’s supervisory board meets next week, two people with knowledge of the matter said, as the Italian rival eyes a takeover.

UniCredit recently bought a 9% stake in Commerzbank (ETR:), expressing interest in a merger of the two. The meeting next week would pave the way for talks between the two to begin.

Commerzbank is entering the discussions as it is duty bound to shareholders to do so, although the bank’s management remains opposed to a takeover by the Italian lender, one of the people said.

The decision to have Orlopp lead the talks could come as early as Tuesday, when Commerzbank’s supervisory board and management begin two days of meetings near Frankfurt to discuss the group’s strategy and response to UniCredit, the people said.

Commerzbank declined to comment.

The bank’s chief executive Manfred Knof announced he would step down from the CEO role at the end of 2025 just hours before UniCredit revealed its stake, raising questions about whether he was best positioned to lead any talks.

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.

The takeover interest has already prompted a backlash from trade unions.

Earlier this week, Knof snubbed overtures for a takeover.

LONG-STANDING INTEREST

UniCredit first approached Berlin to flag its interest in a takeover of Commerzbank in 2017 and considered a competing bid for the German lender again in 2019, when Commerzbank was discussing a tie-up with Deutsche Bank.

In 2019, one source told Reuters that it envisaged fusing the banks but keeping UniCredit’s headquarters and listing in Milan.

When UniCredit CEO Andrea Orcel returned this month to snap up the stake, it caught German government officials off guard, several people with knowledge of the matter told Reuters.

Commerzbank immediately set about persuading the government not to sell more of its remaining 12% stake to avoid a complete takeover by UniCredit, one of the people said.

That person said any takeover could undermine the flow of credit to German companies by preoccupying the bank in complex merger talks as well as exposing Germany to debt risks in Italy by tying Commerzbank to UniCredit.

Government officials, meanwhile, were annoyed by the surprise stake build and put further selling of the state’s remaining holding on ice, another person with knowledge of the matter has said.

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

Strong recent gains for the right-wing Alternative for Germany (AfD) and the left-wing BSW are squeezing the three-party government.

That pressure is strongest on the smallest member of that coalition, the liberal FDP party, which runs the finance ministry, responsible for the stake sale.