Financial institution Unicredit set to acquire Commerzbank

In a significant move, Unicredit CEO Andrea Orcel has promoted the proposed merger between his company and Commerzbank at the "Handelsblatt Bankengipfel" in Frankfurt. Orcel described the merger as a "merger of two German institutions that complement each other."

Orcel highlighted the competitive disadvantage Commerzbank faces in the European context, stating that Europe has the potential to compete with other economic blocs but needs strong banks. He emphasised that the focus of the merger is on profits, and it is not about affecting Commerzbank's branch presence. Instead, it's about improving profits.

The merger has raised concerns about potential job losses, with employee representatives of Commerzbank estimating that the number could be as high as 15,000. However, Orcel has reassured Germans about mass layoffs, stating that there will be no significant reduction in jobs at Commerzbank headquarters as of now.

The exact timing of planned employee layoffs related to the merger is not available as of the current date. Orcel has, however, promised investment in and improvement of Commerzbank's network. He also stated that the branch presence of Commerzbank will not be affected by the merger.

In the German banking market, which Orcel highlighted as one of the most fragmented in the world, Commerzbank has a share of 12 to 13% in the SME business, making it the largest provider in the sector. In Spain, the largest provider in the SME business has a share of 25%, and in Italy, it's 20%.

The federal government has rejected the plan for further sales of the 12% stake it holds in Commerzbank for the time being. Additionally, the Italians have reached a blocking minority of around 26% in Commerzbank.

Orcel's statements about the merger contradict previous rumors about job losses. He has also built a position in Commerzbank through financial instruments and share purchases after the federal government's partial exit a year ago. Orcel is the CEO of Unicredit's HVB parent company.

The news of the merger between Unicredit and Commerzbank is a significant development in the German and European banking sectors. As more details emerge, it will be interesting to see how the merger unfolds and what impact it will have on both companies and the broader banking industry.