According to sources, Commerzbank in Germany is preparing for staff reductions and updated financial targets to defend against acquisition attempts by Italy's UniCredit. The planned measures are expected to be more incremental than revolutionary. However, some believe that preventing the takeover of Commerzbank, which has seen a 50% stock price increase since UniCredit's initial interest, could be challenging.
The job cuts are anticipated to affect several thousand employees, ranging between 3,000 and 4,000 staff out of a workforce of approximately 42,000. These details were shared anonymously due to the sensitive nature of the discussions.
The Commerzbank supervisory board is scheduled to review the cost-cutting plans and new objectives with management during a full-day meeting on Wednesday. The bank intends to unveil its new strategy to the public on Thursday.
Under the leadership of CEO Bettina Orlopp, Commerzbank has been developing a strategy update aimed at showcasing the significant value potential of the bank. UniCredit's actions have been deemed hostile by Commerzbank, which is partially state-owned and has refrained from commenting.
The strategy update is seen as a pivotal moment for Commerzbank in demonstrating its ability to thrive independently and resisting merger pressure from UniCredit. UniCredit's CEO, Andrea Orcel, made headlines with last year's stake acquisition in Commerzbank, signaling a bold move towards a pan-European bank merger.
Commerzbank's strategy update follows a better-than-expected 20% rise in profits, reflecting the bank's turnaround efforts. The bank's current strategy plan was first outlined in 2023, with updated targets announced last September following UniCredit's interest.
The planned job cuts, which may include early retirements, are intended to show the bank's commitment to avoiding more drastic measures under UniCredit while maintaining staff stability. Commerzbank is poised to leverage technology to streamline operations and express interest in smaller acquisitions rather than major deals.
Contrary to developments in Spain and Italy, speculation about potential acquisitions is unfolding in Europe. UniCredit's CEO has expressed optimism about a merger with Commerzbank but has not ruled out withdrawal.
Despite opposition from political figures, investors, and the public, some investors favor exploring negotiation avenues. Political resistance remains firm, as observed in statements from Boris Rhein, the premier of Commerzbank's home state of Hesse, urging UniCredit to withdraw from its acquisition attempts.