UniCredit CEO Orsel attended a virtual meeting with Commerzbank, according to people familiar with the matter

MILAN, Sept 28 (Reuters) – UniCredit Chief Executive Andrea Orsel attended a virtual meeting between the Italian bank and Commerzbank on Friday after becoming Deutsche Bank’s largest private investor, people familiar with the matter told Reuters.

Comerzbank’s incoming CEO Bettina Orlop was also on the call on Friday, which UniCredit officials previously described as the kind of meeting a company has with investors. UniCredit declined to comment.

Orlop, who was named CEO of Commerzbank earlier this week, said at a financial briefing in London on Thursday that the two banks would meet for an “exchange of views” now that UniCredit has become a shareholder.

Italian newspapers first reported Orsel’s participation on Saturday. According to daily Il Sole 24 Ore, the call also discussed Commerzbank’s financial targets, but no mention was made of a possible merger.

Orsel said publicly that a merger would be the best outcome after Italy’s second-largest bank could acquire a 21% stake in its German peer this month, subject to regulatory approval.

But a merger would require broad support from all relevant stakeholders, according to Orsel. Orsel has not ruled out the possibility of selling UniCredit’s shares, which would likely erase the 30% takeover premium that has been built into Commerzbank’s shares since the merger. The shares were purchased by UniCredit.

Tensions in Germany

UniCredit’s investment has caused tensions in Germany, with Commerzbank’s management, employees and Finance Minister Olaf Scholz all voicing their opposition.

The Italian government has been more cautious in the past, but Deputy Prime Minister Matteo Salvini said this week that he does not want UniCredit to move to Germany as part of the deal. A UniCredit spokesman reiterated Saturday that UniCredit is simply an investor in Commerzbank and is not in discussions about where the combined company will be based.

“In any case, UniCredit’s headquarters is in Italy, it has always been in Italy and there is no reason to change that,” the spokesman added.

Reuters reported on Friday that UniCredit is in talks with unions about plans to streamline its headquarters by taking early retirement from up to 1,000 employees and retraining another 600, most of them redeploying to branches.

Shrinking its Milan headquarters could be advantageous if UniCredit pursues a takeover.

People familiar with UniCredit’s long-running plans to buy Commerzbank said the headquarters location has always been an obstacle, with Germany wanting to protect Commerzbank’s German roots and Italy worried that UniCredit would become “too German.” Germany will account for more than 55% of the group’s total customer loans and deposits.