Frankfurt, Germany – A potential multibillion-euro merger between Milan-based UniCredit and Frankfurt-based Commerzbank has stirred up controversy, catching German authorities off guard. The move has triggered a heated response from Berlin, with market observers suggesting that it may have sparked a sense of national embarrassment among Germany’s government. UniCredit’s decision to increase its stake in Commerzbank to around 21% has raised concerns about the future of the European project.
UniCredit announced on Monday that it had submitted a request to boost its holding in Commerzbank to up to 29.9%, following a previous 9% stake acquisition earlier in the month. The potential merger has divided opinions, with some seeing it as an opportunity for increased profitability, while others, including German Chancellor Olaf Scholz, have expressed unease about potential job losses.
Scholz criticized UniCredit’s move as “unfriendly” and “hostile,” while Commerzbank’s Deputy Chair Uwe Tschaege voiced opposition to a takeover by UniCredit, stating clearly, “We don’t want this.” Concerns have also been raised about the possibility of substantial job losses if UniCredit successfully carries out a hostile takeover.
The European banking sector is not accustomed to hostile takeover bids, making UniCredit’s move on Commerzbank an unusual occurrence. The German government, along with trade unions, is closely monitoring the situation, wary of potential job cuts. As UniCredit attempts to make significant inroads into the German banking sector, questions arise about the implications for the European banking union and the broader European project.
Former European Central Bank chief Mario Draghi highlighted the need for additional investment in the European Union to enhance competitiveness. The incomplete banking union continues to pose challenges for the region’s banks, raising fundamental questions about the future of European integration. With the fate of the UniCredit and Commerzbank merger hanging in the balance, the meaning of the banking union and the European project itself come into sharp focus.