Germany pushes to keep Commerzbank listed as merger with UniCredit nears

The Friedrich Merz administration in Berlin will be pushing for Commerzbank to retain its German identity with a domestic stock market listing and to protect jobs, as the lender prepares for a takeover by Italy’s UniCredit.

German Finance Minister Lars Klingbeil will be pressing the demand, along with other conditions, during a planned meeting with UniCredit CEO Andrea Orcel in Berlin next week.

A combination of UniCredit and Commerzbank would create a bank with more than 1.3 trillion euro in assets, encompassing two of the euro zone’s largest economies.

Knowing that the deal would potentially serve its long-standing push for greater cross-border consolidation in the continent’s banking sector, the European Central Bank (ECB) has reportedly leaned towards approving the transaction.

UniCredit and its CEO Andrea Orcel started their Commerzbank takeover campaign in 2024, taking both the German lender and the government by surprise, as the Italian bank, without making much noise, built up a holding.

While Commerzbank and Berlin vigorously opposed the takeover, they ultimately retreated after UniCredit acquired nearly 50% of its target.

Knowing that the inevitable is coming, now German officials are looking to protect jobs as well as the brand of a bank that plays a critical role in financing the medium-sized companies in Europe’s largest economy.

Orcel, on the other hand, foresees 7,000 staff reductions at Commerzbank.

As per the reports, the Merz administration wants Commerzbank to remain listed on the Frankfurt Stock Exchange, although it would be controlled by UniCredit.

Orcel previously stated that UniCredit would act in a way that makes the most economic sense regarding Commerzbank’s status as a listed entity after the takeover.

Klingbeil wants no forced redundancies and that the government, which ⁠has a 12% shareholding in Commerzbank, would keep its right to appoint two non-executive directors, retaining some influence.

Commerzbank, meanwhile, would launch ‌a new share buyback programme of up to 1.2 billion euros (USD 1.39 billion) to boost the shareholder returns.

Commerzbank, valued at about 44 billion euro on the stock market, announced that the ⁠share buyback would begin Friday (September 11) and run until February 10, 2027, at the latest.

“With this next share buyback, we continue to consistently execute our attractive capital return policy,” said CEO Bettina Orlopp.

“The acquired shares will be cancelled, as was the case in two previous share buyback ‌programs,” she added further.

Orlopp, while confirming direct talks with UniCredit, added it ‌would only make sense to serve out her full term until 2029 if she can align on strategy with the supervisory board.

“As long as there is agreement on strategy ⁠and the way forward, I believe that is a good basis,” she said at the Handelsblatt Banking summit in Frankfurt.

“If at some point there is disagreement, we all have to behave like adults and find a solution,” the Commerzbank CEO added further.

While Orlopp warned against a rushed integration, she also stressed the importance of both UniCredit and Commerzbank maintaining close coordination with the German government.