UniCredit CEO Andrea Orcel said a deal with Germany’s Commerzbank is the best outcome he sees — but it’s not the only one.
Appearing Wednesday at a conference in London, Orcel laid out what he sees as his three options on Commerzbank: continue as a significant investor, merge it with HypoVereinsbank — the German bank UniCredit bought in 2005 — or sell the Commerzbank stake he’s amassed and return the capital to shareholders.
He emphasized, though, that Commerzbank, “for us at the moment, is an investment, nothing else.”
“There is no offer, there is no bid,” Orcel said Wednesday, according to Reuters. “We're indeed a large shareholder, a strategic shareholder now, but it is an investment ... and people should comment and think about that as an investment and nothing else.”
Orcel’s comments come two days after UniCredit said it aimed to boost its stake in Germany’s second-largest bank from 9% to 21% — and one day after Commerzbank named its next CEO as it appeared to gird itself against a potentially hostile takeover.
UniCredit would only pursue a deal if it has support from all stakeholders and conditions are right, Orcel said.
“We think it will be best for both banks," Orcel said. “We think it will add a lot of value.”
At the same time, UniCredit has wiggle room because the derivatives contracts it entered Monday would limit losses to the Italian bank, Orcel said.
“Are we going to be dragged [into an acquisition] at terms that don't make sense? Absolutely not,” he said. “Do not underestimate how disciplined we are. It doesn't meet our metrics? We won't do it.”
Orcel did, however, call the potential marriage of an Italian bank and a German one “a test case for Europe.”
A successful combination will show “we can come together and create a stronger bank,” he said, according to Bloomberg.
Orcel said he would not seek a supervisory board seat at Commerzbank, in any event.
“I think it’s inappropriate for us to have a board seat because we’re also a competitor,” Orcel said, according to Bloomberg.
However, he said, “as an investor, we expect to get the same information as all of the other investors.”
“In the same way investors debate, challenge and tell you ‘what about this, what are you doing about that, have you tried this, have you tried that?’ We can do the same,” Orcel said.
Commerzbank executives met Tuesday to discuss strategy in the wake of UniCredit’s rapid buy-up of the German bank’s stock.
At least one board member suggested Commerzbank should lean on the German government — still the bank’s largest stakeholder, for now — to find a domestic investor.
That turned some eyes in the banking space toward Deutsche Bank, Germany’s largest lender — which in years past has also flirted with the idea of tying up with Commerzbank.
Appearing at the same conference as Orcel on Wednesday, Deutsche Bank CFO James von Moltke threw cold water on the notion of a deal.
“I think that we still have work to do before we’re really positioned to participate in consolidation,” von Moltke said, according to Bloomberg. “Our focus has been on ourselves, on driving value from our businesses.”
The bank has trimmed its headcount considerably over the past five years — cutting 18,000 jobs between 2019 and 2021 and aiming to consolidate 3,500 more by next year.
But additionally, von Moltke noted Deutsche’s status as primarily a competitor of Commerzbank.
“We feel quite confident in our position in Germany, in how we’re serving our customers, how we’re building our businesses and market share,” he said. “And to be honest, we stand to benefit a little bit, at least in the near term, from disruption of two of our competitors.”
