German Finance Minister criticizes UniCredit’s “very aggressive” bid for Commerzbank

italian lender UniCréditoThe “very aggressive and very opaque” bet of commercial bank has been criticized by German Finance Minister Jörg Kukies, who stressed that hostile takeovers usually do not work.

“In government, we need to protect the security and stability of a systemic banking sector,” Kukies told CNBC Thursday at the World Economic Forum in Davos. “Hostile takeovers in systemic banks are rarely successful.”

UniCredit now owns a 9.5% direct stake and an 18.5% stake through derivatives in Commerzbank, having acquired a surprise stake in September and subsequently increased its position.

Armed with a solid CET1 ratio (a measure of a bank’s strength and resilience) 16.1% Starting in the third quarter, the Italian lender is asking the European Central Bank, which oversees the euro zone’s largest lenders, for permission to increase its stake in Commerzbank to 29.99%.

The abrupt and accelerated pace of UniCredit’s search has sparked market speculation that CEO Andrea Orcel, a veteran Merrill Lynch M&A dealmaker, is ultimately targeting cross-border consolidation.

The move by UniCredit, which is already present in Germany through its subsidiary HypoVereinsbank, has so far had a cold reception from the fractured government in Berlin, with the outgoing chancellor, Olaf Scholz, criticizing that “hostile attacks and takeovers hostile is not a good thing for banks. “

A domestic political schism in December and upcoming elections could prevent the German administration from closely steering the transaction.

“In this specific case, the behavior of the potential acquirer was very aggressive, very opaque and not very transparent,” Kukies told CNBC’s Karen Tso and Steve Sedgwick. “Hostile takeovers are not a good thing in systemic banks. Therefore, it is about the details of this case, not a general statement that Germany is not open for business from global investors.”

CNBC has contacted UniCredit for comment.

Speaking to CNBC in NovemberJust a few months after his surprise stake buildup, Orcel noted, “Let’s put it this way: We wouldn’t be here if we hadn’t been invited to buy that stake. And it all started in a way that we thought was constructive.”

Questions have been raised about the Italian banking group’s commitment to the deal as it simultaneously launched an ambitious formal takeover bid for its Italian counterpart Banco BPM. at the end of November.

For its part, Commerzbank has been arguing for its case to be independent, and a board member warned against significant job losses as a result of the integration, if the two banks were to merge.

The appetite for cross-border consolidation in Europe has waned somewhat since the controversial acquisition and subsequent split of Dutch lender ABN Amro in 2007 by a consortium led by the Royal Bank of Scotland, which ultimately saw the banks collapse during the financial crisis. . UniCredit’s Orcel, then a senior investment banker at Merrily Lynch, advised on the transaction.

However, analysts describe banking consolidation in the region (and in Germany in particular) as “very late.” Commerzbank was previously the target of an acquisition by the country’s largest lender, Deutsche Bank, before the abrupt collapse of initial talks in 2019.

“The claim that there is no consolidation or change in the German banking sector is absolutely wrong,” Kukies said Thursday.

UniCredit and Commerzbank will publish their fourth quarter results on February 10 and 13, respectively.