Commerzbank aims to thwart Unicredit's takeover attempt through job cuts
In a bid to fend off a potential takeover by Italian banking giant Unicredit, German bank Commerzbank is considering significant job cuts, according to a Financial Times report. Commerzbank is set to present these plans to its works council in the near future, with sources suggesting thousands of roles could be affected.
Italian lender Unicredit currently holds around 28% of Commerzbank and has stated its intention to increase this stake up to 29.9% with regulatory approval. If Unicredit surpasses a 30% stake, it would be obligated to make a public takeover offer. Unicredit CEO Andrea Orcel has expressed ambitions for a full takeover of Commerzbank, as reported by the Financial Times.
Investors generally favor a Commerzbank takeover, with analysts predicting that a merger would result in substantial cost savings through the elimination of duplicate functions. However, the German government and labor unions have expressed opposition to the Italian approach. In 2021, Commerzbank underwent significant restructuring, closing half of its branches and cutting thousands of jobs, leading to an increase in its operating profit and stock price.
Unicredit has dismissed claims of mass job cuts as unfounded, but worries about potential losses persist among employees and unions. National opposition to the takeover has been strong, with German Chancellor Olaf Scholz labeling the acquisition attempt as an "unfriendly attack."
Potential job losses at Commerzbank could have broader implications for German consumer confidence and the country's influence over its second-largest bank. Meanwhile, continued consolidation within the European banking sector, driven by cost-cutting and digitization requirements, may prompt peers to consider standalone restructuring efforts instead of engaging in mergers and acquisitions.
Commerzbank's potential job cuts, aimed at fending off Unicredit's takeover attempt, have also drawn concerns from its employees and unions. If Unicredit manages to increase its stake in Commerzbank beyond 30%, Commerzbank could face pressure from Unicredit's CEO, Andrea Orcel, who has expressed interest in a full takeover, as reported by the Financial Times.
