(Bloomberg) — German Finance Minister Christian Lindner criticized the way UniCredit Spa amassed a stake in Commerzbank AG, underscoring the government’s displeasure with the Italian lender’s surprise move.
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“UniCredit’s approach has harmed many shareholders” and “that is why the German government has decided not to sell some shares,” Lindner said Tuesday during an event in his ministry in Berlin. He was referring to Friday’s announcement that Germany will hold its remaining stake in Commerzbank for now.
UniCredit quickly built up a large stake in Commerzbank, which serves as an important source of financing for German companies. This process went wrong for Berlin, which at the beginning of September had announced the decision to sell the house that it had been in since it was foreclosing on the mortgage more than ten years ago.
German officials expected more investors to buy their shares in the sale, Bloomberg reported. Instead, UniCredit stepped in and bought the entire 4.5% stake available, adding it to the same stake it quietly acquired before the placement.
UniCredit Chief Executive Officer Andrea Orcel followed on Monday, revealing that UniCredit now owns 21% of Commerzbank, mainly through acquisitions. That would make him the largest shareholder in the German government’s front line of creditor.
The way the Italian lender built its position in Germany’s second-biggest bank has sparked opposition to a takeover from Chancellor Olaf Scholz’s ruling party. The move “raised questions,” Lindner added Tuesday.
Strong opposition from the German government has also sparked anger in Italy, with officials privately saying it is unthinkable for Berlin to advocate European integration, and coming out against a possible move by Frankfurt-based Commerzbank, Bloomberg reports.
Lindner reiterated in his speech Tuesday that the government intends to remove the remaining 12% of Commerzbank in the long term.
“The federal government has always made it clear that Commerzbank must be privatized,” Lindner told reporters. “There are public policy reasons for this: the government will not have a share in the competition center for a long time.”
When asked if the government wants to prevent UniCredit from swallowing Commerzbank, he said it is a matter for the lenders’ managers and boards of directors.
Influential representatives of the bank’s staff have made it clear that they are against any move by UniCredit, warning that two-thirds of jobs at the German lender could be cut.
At a meeting outside Commerzbank’s Frankfurt headquarters on Tuesday, board member Stefan Wittmann from the Verdi trade union said Berlin should keep its remaining stake in Commerzbank and take time to evaluate the deal. be present as carefully as possible.
He also said that other investors can get involved. “There are other investors who want to help us maintain our independence,” Wittmann said. “And our federal government can certainly play an innovative role in this.”
Germany’s opposition has criticized the government’s handling of the sale, calling it “reckless” and “a disaster for the German banking sector.”
The CDU/CSU coalition insisted on adding a debate on the deal to the lower house of parliament’s agenda on Wednesday under the heading “Clarification of the events surrounding the sale of government shares in Commerzbank.”
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