UniCredit CEO Backtracks on Commerzbank Pursuit
UniCredit SpA CEO Andrea Orcel has signaled a willingness to abandon his pursuit of Commerzbank AG if necessary.
During a Bloomberg Television interview, Orcel confirmed that he would "of course" be prepared to walk away from the deal. This marks a departure from his previous stance, which had seen him actively pursuing Commerzbank for several years.
Orcel's decision comes amid criticism from the German government and skepticism from Commerzbank's management. Despite building a significant stake in the German lender, UniCredit has faced resistance to its approach.
Orcel acknowledged that he had underestimated the backlash from German authorities. However, he expressed hope that a change in government after the upcoming federal elections could provide him with a fresh opportunity to convince officials of the deal's benefits.
UniCredit has experienced strong financial performance under Orcel's leadership, with higher interest rates boosting lending income and a focus on efficiency. The Italian lender's share price has also quadrupled since Orcel became CEO, giving him more financial firepower for potential transactions.
Despite his interest in pursuing mergers and acquisitions, Orcel has also been willing to abandon projects when necessary. He cited previous examples of walking away from deals with Banca Monte dei Paschi di Siena SpA and Banco BPM SpA.
"M&A adds value if it's done at the right terms, at the right time, in the right way," Orcel said. "Otherwise stay away from it."