UniCredit flags risk of losing key staff, clients in a Commerzbank tie-up

MILAN: Italian bank UniCredit said the uncertainty arising from an integration with Commerzbank could cause employees “with fundamental institutional knowledge” to leave, potentially leading to client loss for both lenders.

UniCredit, which owns almost 30% of Commerzbank, last month unveiled a near 35 billion euro ($41 billion) all-share bid for the rival.

It said at the time the bid would likely lift its holding just above 30% as the low premium would limit take-up. That would give it flexibility for the future because UniCredit would be free to buy Commerzbank shares on the market once above the 30% mandatory takeover threshold.

In documents published on its website ahead of a May 4 shareholder vote to approve issuing new shares to finance the bid, UniCredit said a higher stake “would support and further intensify efforts to unblock Commerzbank’s full potential.”

UniCredit said its decision to launch the bid followed the German bank’s refusal to jointly work on initiatives that could create value for shareholders.

Commerzbank’s clients could benefit from a wider range of products available to UniCredit’s German subsidiary and more services, especially in capital markets, the Italian lender said. However, it also flagged a number of risks deriving from a full integration.

“The decision to integrate Commerzbank could negatively affect relations with clients, suppliers and other commercial partners; a risk which is particularly high in cases where Commerzbank’s commercial partners are direct competitors of UniCredit or clients are happy with Commerzbank’s independence or its specific market positioning,” it said.