Commerzbank’s (CBKG.DE), opens new tab Chief Executive Bettina Orlopp said on Thursday a tie-up with UniCredit (CRDI.MI), opens new tab could create value for both sides, in a significant shift of tone as she looks to direct talks with her counterpart Andrea Orcel.
Germany’s second-biggest bank has been a fierce opponent of UniCredit’s overtures, but after a nearly two-year battle to fend off the Milan-based lender it has given up the fight in recent weeks as UniCredit last month secured a 48% stake in Commerzbank, giving it effective control. Orlopp said on Thursday Commerzbank had begun talks with UniCredit and that she was “optimistic” both sides could find common ground.
However, Orcel, the architect of one of the most contentious European banking battles in decades, has said he wants to negotiate directly with the German government, which has criticised UniCredit’s aggressive attitude and owns around 12% of the bank, and with Commerzbank employees, bypassing management.
The format of the talks is not clear, but Orlopp’s conciliatory tone precedes months of likely negotiations as UniCredit waits for regulatory approvals to be declared in control of Commerzbank , and when and how it will try to buy the rest of the bank it does not own. Orlopp and Orcel met on the sidelines of a private event in July, a source close to UniCredit said. The two discussed accounting measures and other steps related to UniCredit’s taking control, the person said, adding it “was not the start of any negotiation.”
After seeing through a €45 billion ($52 billion) hostile takeover bid for Commerzbank helped by a skilful use of derivatives, UniCredit has outlined pre-merger plans it wants the Frankfurt-based lender to follow to boost profits.
‘DETERMINED TO CREATE VALUE’
“We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees,” Orlopp told analysts.
“I’m optimistic that, step by step, we can find common ground on governance and also on the business model.” Orlopp and her management team had long been opposed to a tie-up with UniCredit. There have been several rounds of talks but all have ended in disagreement.
Orcel said UniCredit has laid out a roadmap it wants in place from January and is ready to call an extraordinary shareholder vote to appoint a new supervisory board at Commerzbank if necessary.
UniCredit and Commerzbank have been holding post-earnings investor meetings since the Milanese lender became a shareholder. Thursday also offered an opportunity for both management teams to exchange views in an investor call.
Orlopp said on Thursday it was in the best interest of both banks to move as quickly as possible and that they would try to identify possible cost savings and whether the banks could join forces on large investment programmes.
