Germany readies antitrust, national security defenses to defend Commerzbank from Italian takeover

Just when Germany thought it could relax, Andrea Orcel’s UniCredit has come back for another bite at Commerzbank, sowing fresh panic both at the bank and among its defenders in Berlin.

The Italian-based lender said Wednesday morning it had indirectly increased its stake in Germany’s second-largest bank through derivatives to around 28 percent, reviving the prospect of an all-out takeover.

Already angered by the Italians’ initial advance in September, the German government lashed out again at what it sees as a creeping, hostile takeover of an essential source of credit to German companies.

“We reject UniCredit’s unsolicited and unfriendly approach,” a government spokesman told a press conference, “all the more so because Commerzbank is a systemically-relevant bank. Unfriendly attacks and hostile takeover are not appropriate in the banking sector.”

There was also evidence that Berlin is preparing to back its words up with action, using national security clauses in domestic legislation, as well as broader antitrust law, to thwart a full takeover. A briefing note for the government, shared on Wednesday with POLITICO, highlighted two main ways in which such defenses could be activated.

In the first instance, the note advanced the argument that Commerzbank represents a vital national security interest as a supplier of credit to the defense industry, a sector that the German government is suddenly having to prioritize again after 30 years of neglect.

As a second line of argument, it said UniCredit could be classified as a non-European entity due to its shareholder structure, something that would expose it to stricter antitrust scrutiny. While registered and listed in Italy, over half of UniCredit’s shares are held by entities based in the U.S. or U.K.

More outlandishly, the note ventured that a takeover could be stopped by arguing that UniCredit had benefited for years from effective subsidies through a low tax rate on its activities in Russia. That could allow the European Commission to challenge it under the so-called Foreign Subsidies Regulation.