Exclusive-German finance minister tells Italy of his concerns on UniCredit move, sources say

8:16 am Friday, September 27th, 2024

By John O’Donnell

BERLIN (Reuters) -Germany’s finance minister has conveyed to Italy’s Treasury his concerns about any takeover of Commerzbank by Italian lender UniCredit, two people familiar with the matter said, as Berlin looks to halt a hostile deal.

Christian Lindner outlined his position to the Treasury – Italy’s economy and finance ministry, led by Giancarlo Giorgetti – in tandem with German Chancellor Olaf Scholz’s public criticism this week of UniCredit’s move to become the biggest investor in its German rival.

Berlin is seeking to put the brakes on a takeover of a bank central to financing the medium-sized firms that are the backbone of the German economy.

The political pressure follows UniCredit’s move to seize control of about a fifth of Commerzbank’s shares, paving the way for a possible takeover bid.

Talks about a potential tie-up began on Friday.

Although Germany’s coalition is divided on several issues, UniCredit’s move on Commerzbank has brought a rare moment of unity, amid a public outcry from workers, and resistance from trade unions and the bank’s management.

While Lindner, of the pro-free market FDP party, has publicly been more ambivalent than Scholz, his finance ministry is equally frustrated by what officials view as aggressive behaviour by UniCredit.

Germany’s finance ministry and Italy’s Treasury declined to comment.

Earlier this week, Scholz described the move by UniCredit as “an unfriendly attack”.

Scholz is being urged by trade unions, traditionally influential with his Social Democrat party, to take a tough stance to protect staff against layoffs, people familiar with the matter said.

Lindner, whose liberal party was trounced in recent regional elections and is facing a national loss of support, is also sensitive to any fallout from the deal.

Opposition politicians blame his ministry for what they said was a botched sale of part of the government’s stake in Commerzbank that opened the door to UniCredit’s surprise move. Lindner has rejected this criticism, insisting the government cannot discriminate against any buyer.

Nonetheless, there is frustration with UniCredit for its actions, seen by the ministry as a bid to outpace any other would-be buyers, said one person with direct knowledge of the matter.

While some senior lawmakers in Lindner’s FDP party privately feel the government should leave investors to judge the deal’s merits, the person said, officials deem UniCredit’s approach to be aggressive and see a hostile takeover as a possible threat to Germany’s financial stability.

UniCredit CEO Andrea Orcel has suggested he could walk away from any deal if it is not wanted.

(Reporting by John O’Donnell; additional reporting by Giuseppe Fonte in Rome; Editing by Elisa Martinuzzi, Tom Sims, Jason Neely and Catherine Evans)