By Tommy Reggiori Wilkes
LONDON (Reuters) -UniCredit’s CEO Andrea Orcel said on Wednesday he may need to wait until 2027 before deciding whether to try and take over Commerzbank, as Germany’s fiscal splurge pumped up the bank’s shares and he needed to examine any deal’s value.
Orcel thrust his bank into two M&A situations last year by acquiring up to 30% in Germany’s Commerzbank through derivatives and bidding for Italian peer Banco BPM.
UniCredit received approval from the European Central Bank last week to convert those derivatives into up to 29.9% of Commerzbank shares. It said it would likely wait until next year before taking a decision on pursuing a full takeover.
“When we bought, the bank doubled in value, and you go back into the small detail of price,” he told the Morgan Stanley European Financials Conference in London, adding that Commerzbank’s stock was getting a boost this year from Germany’s spending plans.
“We want to understand if there is a reflection of the value with [Commerzbank’s share] price,” he added.
“I can sit and wait until the end of the period of 2027,” he said, while warning that the time it was taking to get European banking M&A done was making him “less optimistic” about dealmaking more broadly.
Orcel said the lender must now wait for approvals from German anti-trust authorities and to engage with a new German government – which has said it opposes a takeover – delaying any move to convert the derivatives into Commerzbank shares.
“It is difficult to see how we can be on the other side of things before September or October,” he said.
The dealmaker-turned-CEO told the event in London that it would be at least a year before he had turned his initial 9% stake in Commerzbank announced in September into a 30% holding, and nine months before UniCredit had decided whether to proceed with its bid for BPM.
“This is a long time, this is a lot of uncertainty,” he said.
Orcel also told the event that UniCredit could increase its investment into its German business because the fiscal spending announced in the country was improving Germany’s prospects.
(Reporting by Tommy Reggiori Wilkes; Editing by Iain Withers, Sinead Cruise and Louise Heavens)
