Unicredit is terrorizing the German government with its takeover of Commerzbank

In a strategic chess game played on the grand chessboard of European finance, UniCredit, the Italian banking giant, has made a bold move toward Germany’s Commerzbank, signaling a potential shift in the balance of power within the EU banking sector. This move—which was signaled by UniCredit is acquisition of a sizeable portion of Commerzbank—sparked a flurry of responses, analysis, and conjecture in the financial community and on sites like X, where sentiments in real time frequently mirror shifting market dynamics.

The takeover dance

UniCredit, under the leadership of its CEO, Andrea Orcel, not only acquired a 9 percent stake in Commerzbank but also showed its intention to potentially increase its holdings and then put the threat into action, rising to 21 percent. Afterwards, it said it was considering buying another 8 percent, rising to 29 percent and thus theoretically becoming the leader of the German bank.

The initial stake acquisition was greeted by a 17 percent surge in Commerzbank shares, reflecting market optimism or perhaps surprise at the move. Later, UniCredit’s CEO approached Commerzbank to explore merger talks, a move that suggests that UniCredit’s long-term interest may not just be a stake but a full merger or significant control.

German government’s position

The German government, which still holds a 12 percent stake in Commerzbank after its rescue during the 2008 financial crisis, has shown a mixed response. While acknowledging that it is not fundamentally opposed to a merger, opposition from Commerzbank management and the sensitive nature of national pride in banking sovereignty have complicated matters.

Reports and shared sentiments about X highlight a German government caught between the economic logic of reducing its stake and the political implications of allowing a foreign entity to control what has been considered a strategic national asset.

In the end, Scholz said he opposed the merger, demonstrating a kind of “Banking Racism” toward a takeover by an Italian bank. Officially, the reason for the opposition is related to the failure to give notice of the deal to the government, but we know full well that Germans could not tolerate a financial group of Commerzbank’s history coming under Italian control. It would be a national disgrace.

What will happen now?

In any case, Orcel has enough of a stake to be influential on the board, so orcel could aim for an integration of many services between the banks in an effort to make them more efficient. It would still be a minimal integration, probably not Orcel’s goal. The latter could also target the market, incurring its wrath, perhaps declaring that interest is waning because of the opposition of the government , already very unpopular. The stock would plummet, opening the space for further acquisitions by unicredit and shifting the responsibility to the Scholz government. A double disaster for Berlin.