UniCredit CEO Orcel Says Merger with Commerzbank Could Boost Shareholder Value

UniCredit CEO Andrea Orcel stated that a merger with Commerzbank could deliver substantial value for stakeholders, strengthening both banks in the German market. Orcel highlighted potential savings in central functions while leaving the decision to Commerzbank’s stakeholders.

Commerzbank Stakeholders to Decide on Potential Merger as UniCredit's 9% Stake Sparks Resistance

UniCredit CEO Andrea Orcel told a German newspaper on September 16 that a merger between Commerzbank (CBKG.DE) and UniCredit (CRDI.MI) could generate value for all stakeholders and establish a more robust bank. According to Reuters, she also stated that Commerzbank stakeholders would decide whether to proceed with the merger.

Last week, Italy's second-largest bank acquired a 9% stake in Commerzbank, which caught the German authorities off guard. Local management has received a hostile reception and is attempting to thwart the acquisition.

Orcel Highlights Potential Value of UniCredit and Commerzbank Merger, Emphasizing Stronger Competition in Germany

The Italian banking chief stated that a merger with the smaller Commerzbank could "create a much stronger competitor on the German banking market," thereby better supporting retail customers and German medium-sized companies, known as the Mittelstand, that play an essential role in the economy.

"For the moment, we are only a shareholder. But a merger of the two banks could lead to considerable added value for all stakeholders," he told the Handelsblatt newspaper.

"There are very few overlaps" between the banks, he said.

Now he has laid out the case, Orcel said it was up to Commerzbank to decide.

"The decision lies with Commerzbank's stakeholders," he said.

Commerzbank declined to respond.

When asked about the timing of UniCredit's future discussions with Commerzbank, Orcel informed Handelsblatt that there was no definitive timeline.

If "we come to the conclusion that a merger is best for both of us, that would be great, but ... as a major shareholder I must first ensure that our investment develops well," he said.

Orcel stated that the potential for savings was in central functions rather than in areas of customer business, products, or the geographical network in an apparent effort to reassure Commerzbank employees concerned about their employment.

"I believe that many banks have neglected to make their central functions more efficient," he said.