UniCredit Virtual Meeting with Commerzbank

MILAN (Reuters) – UniCredit chief Andrea Orcel attended a virtual meeting held on Friday with Commerzbank after becoming the German lender’s biggest private investor, according to a source with knowledge of the matter.

Commerzbank’s designated CEO Bettina Orlopp was also present on the conference call, which a UniCredit source described as a routine meeting for companies with their investors. UniCredit declined to comment.

Orlopp, appointed Commerzbank CEO earlier that week, mentioned at a financial conference in London that the two banks would meet to “exchange views” following UniCredit’s acquisition of shares.

Italian newspapers first reported Orcel’s attendance. Il Sole 24 Ore reported that Commerzbank’s financial targets were discussed, while no potential combination was mentioned.

Orcel has suggested that a merger would yield the best outcome after UniCredit built a 21% stake in Commerzbank, pending supervisory clearance.

However, any merger would need broad support from stakeholders, according to Orcel, who has not excluded selling UniCredit’s stake, a move that could erase a 30% takeover premium in Commerzbank shares since the stake acquisition.

Tensions in Germany

UniCredit’s investment has caused tensions in Germany, where opposition has come from Commerzbank’s management, employees, and the German Chancellor, Olaf Scholz.

The Italian government has taken a cautious stance, with Deputy Prime Minister Matteo Salvini expressing concern over UniCredit relocating its base to Germany as part of any potential deal.

A UniCredit spokesperson reiterated that the bank is simply an investor in Commerzbank, and there are no discussions about a combined entity’s headquarters. The spokesperson emphasized that UniCredit’s headquarters, located in Italy, will remain unchanged.

Reports indicate that UniCredit is in discussion with unions about plans to reduce its central offices, allowing up to 1,000 staff to retire early and retraining another 600, mostly to be transferred to branches.

A smaller corporate center in Milan might benefit UniCredit if a deal is pursued. Sources familiar with UniCredit’s plans to acquire Commerzbank have noted that the location of the headquarters has been a significant hurdle, with Germany keen on preserving Commerzbank’s German identity while Italy fears UniCredit becoming overly German.

Germany would account for over 55% of customer loans and deposits in a merged entity.