Milan (Reuters) reported that there’s limited possibility for advancing the acquisition strategy, as COMERZBANK has become pricey, and Italy is effectively blocking Banco BPM’s takeover.
Orcel, a seasoned investment banker, joined Unicredit in 2021 with plans to accelerate growth through mergers and acquisitions.
Last year, Orcel’s maneuvers regarding Commerzbank and the smaller Pierbanco BPM contributed to a significant seven-fold increase in Unicredit’s stock price, which drew a strong backlash from both Berlin and Rome.
Unicredit has managed to secure a month’s delay from Italian market regulators while negotiating with the government, disputing the conditions Italy has established for its BPM bid.
Rome has asked Unicredit to halt its business dealings involving Russian companies, with exemptions only for necessary payments to support Western businesses operating there.
Orcel noted the uncertainty surrounding deposits under 1 billion euros in relation to transactions of 6 billion euros processed each quarter, which have dropped from 25 billion.
“If that’s unclear… the risk of proceeding is virtually zero, so we’ll withdraw,” he mentioned at Goldman Sachs’ European Financial Conference in Berlin, estimating there’s less than a 20% chance that the BPM acquisition will go through.
David Benamou, chief investment officer at Axiom Alternative Investments, commented that he holds interests in numerous Italian banks and viewed Orcel’s remarks as a strategy to navigate market and shareholder expectations and exert pressure on the Italian government.
Orcel also expressed skepticism regarding Commerzbank’s takeover potential, emphasizing that at this stage, there’s no real value for investors in making an offer. He communicated this to CNBC, stressing again the lack of investor value.
On Tuesday, the German finance minister remarked that a letter from Prime Minister Friedrich Merz to Commerzbank staff opposing the Unicredit proposal was an “important signal” regarding the government’s position.
Unicredit has acquired a 28% stake in Commerzbank, and Orcel mentioned that by the end of the month, they expect to finalize a step that will enable Unicredit to convert two-thirds of its remaining shares into derivatives.
