Just days before UniCredit CEO Andrea Orcel set his sights on a takeover target in Italy, more evidence emerged of fierce resistance to his interest in German flagship lender Commerzbank.
A group of customers from Germany’s corporate elite pleaded with Commerzbank’s CEO to reject the deal, warning that the bank would face the same fate as Bavarian bank HVB, which UniCredit bought in 2005 and subsequently overhauled and scaled back.
Orcel had discreetly built a substantial stake in Commerzbank and announced his bid in September, prompting backlash from politicians, industry and unions, who warn of potential job losses and detrimental effects on lending to small and medium-sized companies.
Commerzbank’s CEO has been met with resistance, with some likening a potential takeover to the demise of HVB, which was once a proud Bavarian bank that has been reduced to a shadow of its former self after being bought by UniCredit.
The resistance is not limited to Commerzbank’s board, as even executives at the bank’s major customers, including a Mittelstand company, have come out against the deal, voicing their concerns over potential job losses and changes to the bank’s decision-making process.
Some in Germany, including Finance Minister Joerg Kukies, see an Orcel-led takeover as “all but dead”, and the company’s shift in focus to a €10 billion offer for smaller Italian rival Banco BPM was greeted with guarded relief in Commerzbank, according to people familiar with the bank’s thinking.
However, Orcel may not yet be ready to throw in the towel, with sources indicating that he is bracing for a long, difficult battle in Germany that could take several months.
One of the executives who met with Commerzbank’s CEO recently, Ulrich Grillo, a Mittelstand company leader, expressed his fears that key financing decisions would shift to Milan, while another attendee, venture capitalist Christian Miele, said “no one in the room was in favor” of the deal.
The meeting capped off weeks of pushback against UniCredit, which has been accused of having a history of cost-cutting and downsizing its acquisition targets, something that critics warn could erode Commerzbank’s independence and threaten the stability of the German banking system.