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Andrea Orcel plots UniCredit’s boldest move yet on Commerzbank

Former UBS dealmaker has contemplated a tie-up with the state-backed German lender for years but Berlin may balk

UniCredit’s announcement on Wednesday morning that it had built a 9 per cent stake in rival Commerzbank caught the German establishment by surprise. But the move was at least seven years in the making.

Shares in Commerzbank jumped 17 per cent as investors bet that the purchase would lead to a full-blown bid by UniCredit, which has been surrounded in takeover rumours ever since chief executive Andrea Orcel took charge more than three years ago.

The move paves the way for a deeper tie-up between the second-biggest listed lenders in Italy and Germany, potentially leading to one of the most significant cross-border mergers in European banking and kick-starting a much-anticipated consolidation wave across the continent’s fragmented banking sector.

“Orcel is making clear that UniCredit will be the largest consolidated bank in Europe — and that is what Europe needs,” said Cole Smead, chief executive of UniCredit shareholder Smead Capital Management.

Since the former Merrill Lynch and UBS dealmaker took over at UniCredit, he has done little to quash speculation he would embark on a major takeover. In May, Orcel told the Financial Times that “theoretically, most of the rumours are true inasmuch as, in every single market we look at every possible target.”

The bank’s estimated €6bn of excess capital has only added to the talk.

In fact, a tie-up between UniCredit and Commerzbank has been discussed between the two sides on several occasions over the past few years, the FT has reported. And the Milan-based lender has discussed its interest in its German rival with German government officials on multiple occasions before this week, according to people with knowledge of the talks.

The deal is also viewed as the most likely in Europe by M&A bankers given the potential synergies between Commerzbank and UniCredit’s HypoVereinsbank German subsidiary.

UniCredit has requested permission from the European Central Bank to increase its Commerzbank stake to above 9.9 per cent and executives at the German lender were on Wednesday considering the approach, according to people briefed on internal discussions.

While Orcel is the first chief executive at UniCredit to make a public move on the German lender, UniCredit executives first approached German officials about a potential deal as early as 2017. At that time, they decided not to pursue talks due to political opposition to cross-border deals in Germany and the Milan-based lender’s own restructuring plans.

Two years later, UniCredit under chief executive Jean-Pierre Mustier prepared a bid to take control of Commerzbank, which received a €23bn state bailout during the financial crisis.

The plan offered an alternative to the merger that the German lender was then discussing with its domestic rival Deutsche Bank.

The idea was to combine Commerzbank with HypoVereinsbank, a more complementary fit than the Deutsche proposal that could mean fewer job cuts and branch closures. HypoVereinsbank, which is predominantly based in Bavaria and the Hamburg area, had less overlap with Commerzbank’s nationwide business.

Mustier was also prepared to consider listing the merged bank in Germany, a suggestion that proved politically toxic in Italy and hastened the Frenchman’s exit in 2021.

Talks over both deals fell through, however, and the German state was left with a roughly 16 per cent stake in the bank.

UniCredit revived its interest in Commerzbank soon after Orcel, who succeeded Mustier, aborted a deal to buy Italian lender Monte dei Paschi di Siena in late 2021.

Informal talks were planned between Orcel and Manfred Knof, his opposite number at Commerzbank, in early 2022. But they were abandoned after Russia’s full-scale invasion of Ukraine forced UniCredit to prioritise dealing with its Russian subsidiary.

Under the original plans, a merger between Commerzbank and HypoVereinsbank would have created a powerhouse in Germany with €785bn in assets, 1,000 branches and 48,000 employees — second only to Deutsche Bank.

UniCredit was then prepared to amass a sizeable stake in Commerzbank and merge the German lender with HypoVereinsbank. The combined entity would have been based in Germany, while UniCredit would have maintained its headquarters and listing in Milan. Commerzbank would have retained a free float of shares listed on the Frankfurt stock exchange.

There is uncertainty about how UniCredit would seek to structure any deal this time around. But the Commerzbank deal follows a similar model UniCredit used when it bought a 9 per cent stake in Alpha Bank from the Greek state last year. Investors predicted the Alpha Bank purchase was a way of UniCredit testing the water in advance of building a bigger position over time — something that has yet to happen.

While there is expectation among some UniCredit investors and bank insiders that it could take the same tack with Commerzbank, there are potential roadblocks to a full takeover.

First, the German government — which is still the biggest shareholder in Commerzbank with a 12 per cent holding — could demand the lender retains a listing in the country as well as its own domestic supervisory board, which is currently chaired by Jens Weidmann, the former German central bank governor.

“Germany needs to have domestic banks to finance its economy, the Mittelstand, and Commerzbank is key here,” said a banker who has experience negotiating with the German government. “This is not only a financial deal, it is a political deal and UniCredit will need to be careful how they deal with the German government.”

UniCredit also faces resistance from Germany’s powerful unions over potential job cuts and a shift in power from Frankfurt to Milan.

“We will fight such a transaction tooth and nail,” said Stefan Wittmann, a senior official at Germany’s services sector union and a Commerzbank supervisory board member. “If necessary, will also organise public protests.”

There is also a scenario where Deutsche Bank would renew interest in its domestic rival and launch a rival bid, having failed to strike a deal five years ago. However, people close to Deutsche said the bank’s recovery in recent years made it much less interested in pursuing a deal.

Another potential hurdle for UniCredit is if its own investors — who have enjoyed a 230 per cent share price gain over the past three years — push back against the deal because of concerns it might affect the bank’s promise of returns to shareholders. The bank has committed to returning €8.6bn, its entire 2023 profit pool, to investors in the form of buybacks and dividends, and has built an expectation of further returns.

Orcel has been clear with investors he would only pursue a transaction if it meets certain conditions, including a 15 per cent return on investment.

But his empire-building met with a muted response on Wednesday. Shares in UniCredit closed flat, giving the Milan-listed bank a market value of €59bn — three times that of Commerzbank. One top 10 shareholder told the FT that they did not expect the return policy to be affected even if UniCredit were to increase its stake in Commerzbank.

“It’s not an either-or,” they said. “On paper it’s the best match [for UniCredit]. It’s a good deal if they can clear it — but whether they can, we will see.”

WWD sat down this week with Margot Robbie to discuss her Chanel ad campaign, costarring Jacob Elordi, future projects and more.

“Are you surviving in the heat out there?” asked Margot Robbie.

It hit 105 degrees in Beverly Hills, and as high as 119 degrees in the Valley. More importantly, given her pregnancy, was she?

“Barely,” she laughed, a mini fan in hand.

Robbie, the 34-year-old Australian actress and star of “Barbie,” had just made her baby bump “debut” — as headlines put it this week — at the Los Angeles premiere of “My Old Ass,” produced by her company LuckyChap Entertainment. She’s expecting her first child with husband and business partner Tom Ackerley.

It was now Tuesday afternoon. Sitting in a presidential suite of a five-star hotel in L.A., wearing head-to-toe Chanel, she had beauty news to share. An ambassador for Chanel since March 2018, Robbie has entered a new era with the French house: she’s the face of Chanel No.5.

“I’ve just always known about Chanel No.5,” Robbie said of her history with the fragrance, which comes in five interpretations. There’s the original Parfum created in 1921; Eau de Toilette, out in 1924; Eau de Parfum in 1986; Eau Premiere in 2008, and L’Eau in 2016, composed by Chanel in-house perfumer Olivier Polge.

Robbie joins spokesmodels that have included Catherine Deneuve, Nicole Kidman and Chanel herself, who appeared in its first advertisement. And of course, there’s Marilyn Monroe, who’s closely connected with the scent after famously naming it in a 1952 Time cover story.

“It’s iconic and an iconic brand,” Robbie went on. “It’s that thing that you always associate with absolute height of luxury. At least that’s how I always felt about Chanel. Now I’m in the Chanel family; I associate with more personal memories and things that I’ve gotten to do.”

Most recently, that was working with Luca Guadagnino, who directed its campaign film. Robbie stars alongside fellow Australian actor Jacob Elordi. “I wanted to work with Luca Guadagnino for so long,” she said.

Guadagnino makes movies about desire, he says in a behind-the-scenes video of the campaign, and how desire can both pull people together and apart.

“He can create that sensual mood in a very cinematic way,” Robbie said of Guadagnino. “I also love that about his films, so I think we definitely played with that [desire]. It was more playful in this, because the tone of it actually is quite light.”

Robbie and Elordi have a missed rendezvous in the ad. Robbie’s character is seen getting ready for her date with excitement and anticipation. When the two miss one another in a twist of fate, she laughs it off, diving into the ocean and resurfacing in the light.

“The woman that I’m playing in this commercial, she’s very serene,” Robbie continued. “It’s not a palpable hunger. It’s more like there’s a quiet confidence about her and a serenity about her that I also really enjoyed playing.”

It’s a serenity of solitude, with power in her femininity — a clear message behind the film that Robbie brings to life.

“I honestly feel like that’s a big part of growing up,” Robbie said of finding peace with solitude. “For me, in particular, it’s like I need constant distractions to avoid things that I can’t sit with in myself. And I think as I get older, learning to be alone and being happy and content on my own, is such a huge important thing in life. I mean, I think you’re going to waste so much energy and ultimately not be happy if you’re just scrambling to find the thing you want in your external life. If you can’t find it within you, it’s not going to last. It’s going to be there for a second, and then it’s going to be gone. But if you can find it within yourself, you can always be happy. I know that’s a very existential answer to the question, but as I get older, for sure, I spend so much more time introspecting in that way.”

Robbie follows her instincts, she said, when it comes to acting roles at this point in her career: “When I read a character and I can’t really figure them out, that’s when I get excited. I’m like, ‘Oh, I don’t get you. I want to explore that.’”

Moving forward, her focus continues to be on LuckyChap Entertainment, founded with Ackerley, Josey McNamara and Sophia Kerr. LuckyChap Entertainment is behind some impressive titles including “Barbie,” as well as “Saltburn,” “Promising Young Woman,” “Birds of Prey,” the Netflix series “Maid” and Hulu’s “Dollface.” “My Old Ass” is the latest project, starring Maisy Stella and Aubrey Plaza.

“We look for original voices,” Robbie said of producing. “Megan Park, who wrote and directed ‘My Old Ass,’ she has such a unique voice. She has a very youthful voice. If you’ve seen her other film ‘The Fallout,’ you’ll also probably agree, she can access the things that a younger generation are thinking or feeling in a way that feels more authentic, I think, than perhaps other people do.”

This fall LuckyChap Entertainment will present its first musical production, “The Big Gay Jamboree,” with Marla Mindelle of the off-Broadway hit “Titanique.”

“Previews start in September, in a couple weeks,” Robbie said. “Again, a very original voice. The creator and performer, Marla Mindelle, is very original and just a genius talent that we’re excited about.”

Bird flu and mpox show little learnt from Covid about future pandemics

More aggressive actions and better co-ordinated responses needed to contain viruses, say public health experts

Since the Covid-19 emergency was officially declared over last year, the US has been gripped by one of the biggest bird flu outbreaks among farm animals in its history. The World Health Organization, meanwhile, just last month declared the mpox virus a new global health emergency, due to its rapid spread in central Africa.

For public health experts, outbreaks like these are a worrying sign of how little has been learnt from the Covid pandemic. “We should have realised we need to take outside chances more seriously and act more aggressively early to forestall these epidemics — and twice we haven’t done that,” says Scott Gottlieb, former US Food and Drug Administration commissioner.

In response to the H5N1 avian flu outbreak, which has spread to cattle herds in more than a dozen US states, in some cases affecting dairy workers, Gottlieb notes that US human and animal health authorities have struggled to co-ordinate their response, thus holding up testing efforts. The WHO, he adds, has been too slow to approve vaccines for mpox.

At present, the bird flu outbreak is still classified as a low risk to human health, while mpox — which produces a skin rash on infected individuals — relies on close contact in order to spread, reducing its pandemic potential. However, the key weapons that eventually helped to contain the Covid pandemic — well-resourced public health responses, testing and vaccines — have been slow to materialise in reaction to both of the more recent outbreaks.

At the same time, the WHO’s pandemic preparedness treaty negotiations continue to be hampered by delays and division between richer and poorer nations. This treaty, which was centred on the need for a co-ordinated international response to any future pandemic, is now not expected to be agreed until 2025 — far beyond the original deadline of May this year.

With climate change likely to increase the risk of viruses spilling over from animals, public health authorities are having to ask whether the world can respond fast enough when the next pandemic threat inevitably emerges.

“You can see that the pandemic response was, in part, political — and that hasn’t gone away,” points out Leif Erik Sander, chair of infectious diseases at Berlin’s Charité hospital.

In the US, the state of Minnesota, where eight cattle herds have been infected with bird flu, stands out for its aggressive response. Not only have its testing levels been higher than others in the US, but also it has provided grants for farms to procure deterrents — including lasers that scare off wild birds — and ensured cows can only participate in state fairs with a negative H5N1 test.

Minnesota’s public health system ranks among “one of the strongest in the country”, says Luciana Borio, a senior fellow for global health at the Council for Foreign Relations.

Elsewhere, though, the response has been much patchier, as health authorities have struggled to gain access to farms to test animals and workers. At times, the Centers for Disease Control and Prevention and the US Department of Agriculture have even struggled to work together, Borio says.

In Thailand, public health authorities have mobilised rapidly against mpox. After detecting a case of the new, more transmissible and deadly form of the disease, they reintroduced a screening process for travellers arriving from 42 affected countries.

“Within five days of the first case arriving into Thailand, [that case] had symptoms, [had] sought medical care, and the clinician was on alert,” says Rick Bright, former director of the US government’s Biomedical Advanced Research and Development Authority. “Then, within a week they had announced the results and shared the full [genome] sequence — that’s how it should work.”

As was the case during the Covid pandemic, however, access to vaccines for both bird flu and mpox has been greater for richer nations. Between them, the US and the European Union have bought up almost all available doses of the existing bird flu and mpox jabs.

To help African nations, such as the Democratic Republic of Congo, which are facing an upsurge of mpox cases, the US and the European Commission have pledged donations of the vaccine developed by Denmark-based biotechnology company Bavarian Nordic, the leading maker of mpox vaccines, but these doses pale in comparison with the size of their stockpiles.

One bright spot, however, is how the advancement of vaccine technology is likely to enable faster pandemic jabs in the future — largely thanks to the speed with which mRNA shots can be developed. The US government awarded Covid vaccine maker Moderna $176mn to research an mRNA bird flu vaccine.

Meanwhile, rival jab manufacturer BioNTech is collaborating with the non-profit Coalition for Epidemic Preparedness Innovations (Cepi) on an mpox mRNA jab.

Cepi’s efforts to fund early-stage clinical trials for a range of pandemic potential viruses, otherwise known as Disease X, will put “the world on a better footing to respond to the next pandemic”, argues Bright.

The need, however, for a significant increase in vaccine manufacturing across the world — especially in less developed regions, such as Africa — has “fallen down the priority list”, Bright warns.

“Let’s put our money where our commitments are, and let’s build regional capability and capacity,” he says.

Cepi, at the latest count, is only just over half way to a $3.5bn funding target to keep its plans on track through to 2027.

Nevertheless, Richard Hatchett, its chief executive, believes infectious diseases can only fall so far down the political agenda.

“It will be impossible for governments to neglect this for very long before something comes along and refocuses their attention on it,” he argues.

“I would like to believe that, over time, we won’t continue to have that ebb and flow,” Hatchett adds. But, if the attention ebbs too much, “nature will strike back.”

Oil-rich emirate draws new name as it seeks to become financial hub to rival neighbouring Dubai

The $1.3tn asset manager PGIM has become one of the biggest players in its industry to open an office in Abu Dhabi, as the oil-rich emirate seeks to build itself up as a financial hub to rival neighbouring Dubai.

The arm of New York-listed insurer Prudential Financial announced on Thursday that it was opening an office in the Abu Dhabi Global Market centre, its first in the Middle East.

A number of hedge funds and billionaire family offices have set up in the city, which is home to sovereign wealth funds including the nearly $1tn Abu Dhabi Investment Authority.  

Abu Dhabi Global Market’s head of market development Arvind Ramamurthy said PGIM’s arrival would “strengthen ADGM’s position”.

PGIM’s new Middle East head Mohammed Abdulmalek said the move “emphasises our ongoing dedication to our presence in the UAE and our commitment to the Middle East”, and he described Abu Dhabi as a key market for PGIM. The asset manager said it had secured a licence to operate in ADGM.

“Middle Eastern sovereign wealth funds along with other institutional clients and evolving family offices are looking for partners who can support them as they strive to deepen the local capital markets and become more than providers of capital to the rest of the world,” said David Hunt, PGIM’s CEO. “It’s important to be close to our partners to work most effectively with them as they achieve these goals.”

For years, global money managers served Gulf clients from offices in Europe, North America or the regional financial hub of Dubai.

Abu Dhabi wants to attract some of that business as it tries to diversify its economy and lessen its dependence on oil. It has sought to convince money managers they will have a better chance of raising funds in the oil-rich state if they demonstrate their commitment there, including by opening offices in the UAE capital.

It is also aiming to draw finance professionals with low taxes, as well as private schools and healthcare.

Other major asset managers have a presence in Abu Dhabi too. ADGM said last month that 112 asset and fund managers now operate there, and that firms including Rajiv Jain’s GQG Partners and Morgan Stanley have obtained licenses.

BlackRock registered two “Middle East infrastructure” funds at ADGM last year, the centre’s registry shows, and BlackRock has an office on Abu Dhabi’s seafront promenade, according to its website. 

Billionaires have also set up shop. Ray Dalio, the founder of hedge fund Bridgewater Associates, has opened a family office in Abu Dhabi, while former Apollo Global Management chief executive Leon Black this week announced a new Abu Dhabi branch of his family office Elysium.

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Christie’s chief says Europe struggling to remain art-market centre

Marlborough’s Mayfair building for sale; Charles Saatchi offers 500 works for charity; Frieze slower in Seoul

Guillaume Cerutti, chief executive of Christie’s, kicked off London’s new season with some sobering statistics at this year’s Art Business Conference on September 10. He disclosed that, between 2010 and 2023, the value of sales at his auction house grew 32 per cent in the Americas and 22 per cent in Asia Pacific but fell 6 per cent in Europe (including the UK). Across a similar period (2012-23), he reported that buyers from the Americas and Asia Pacific grew 27 per cent and 33 per cent respectively, while falling 37 per cent in Europe.

The real challenge now, Cerutti said, is not about the post-Brexit “rivalry” between London and Paris, but more “how can we pull together . . . the commercial field and the museum world . . . to keep Europe at the centre?” Because of Brexit, he conceded, London has lost being a “fabulous entry point” to the rest of Europe.

Other speakers voiced concerns about the more recent news that London’s wealthy, including donors to the arts, could leave the country in expectation of higher taxes under the UK’s new Labour government. Charlotte Appleyard, director of development and business innovation at London’s Royal Academy of Arts, cited a recent report by advisers Henley & Partners that expects 9,500 millionaires to leave the UK this year.

Cerutti said that, for the art market at least, this was unlikely to be a big problem and assured the audience that “we will continue to fight for London”, including by supporting events such as the 1-54 contemporary African art fair.

‘Balloon Monkey (Blue)’ (2006-13) by Jeff Koons, which will be sold at Christie’s © Christie’s Images

One highlight that Christie’s has already secured for the city’s October auctions is Jeff Koons’s “Balloon Monkey (Blue)” (2006-13). The guaranteed work comes with a £6.5mn-£10mn estimate and is sold by fellow artist Damien Hirst, who showed it in his gallery in 2016. (Christie’s would not confirm that Hirst was the seller.) It goes on show in London’s St James’s Square from September 30 to October 10.

The London building belonging to Marlborough Gallery, which closed this summer after 78 years of business, is on the market, priced in excess of £25mn. The 10,300 sq ft, 10-floor freehold building on Mayfair’s Albemarle Street, called Scandia House, is “a rarity” on the property market, says David Rosen of Pilcher London, which is offering the space.

In June, Marlborough trustee Franz Plutschow said that closing the gallery, which also operated in New York, Madrid and Barcelona, came “after long and careful consideration”. Representatives from the gallery did not respond to requests to comment on plans for its other buildings or the dispersal of the gallery’s stock, rumoured by parties close to the business to be worth about $250mn.

Meanwhile, the gallery’s artists are gradually finding new ways to market. The New York-based British painter Bill Jacklin, who first showed with Marlborough Gallery in the 1970s, is now collaborating with Portland Gallery, which will bring three of his paintings to this month’s British Art Fair, priced between £24,000 and £36,000 (September 26-29).

‘Ana’ (2007) by Tanyth Berkeley © Saatchi Collection

British collector Charles Saatchi is having a collection clear-out, starting this week with the first part of an online sale of about 500 works, to benefit London’s Great Ormond Street Hospital. The first tranche of 150 works, on offer through Artsy until September 25, have estimates that range from £300 to £60,000. These include photographs by John Stezaker (est £2,000-£3,000), Hannah Starkey (est £1,000-£1,600) and Tanyth Berkeley (est £400-£600), plus a taxidermied horse on a “Jesmonite blob” by the Iranian-born Soheila Sokhanvari (“Moje Sabz”, 2011, est £2,600-£3,600). The September works have a low estimate of £200,000, with further sales on Artsy in October and December.

Separately, Bonhams will auction the Saatchi Collection’s vast coal-sack installation by Ghanaian artist Ibrahim Mahama for between £30,000 and £50,000 at its Modern and Contemporary African art sale on October 16. The 2013 work was first shown in Saatchi Gallery’s Pangaea: New Art from Africa to Latin America exhibition in 2014.

‘The Wind Blows-240506’ (2024) by Lee Kang-So was sold by Thaddaeus Ropac at Frieze Seoul © Lee Kang-So/Zagupsil

Reported sales from fairs in Seoul and New York have come in slower and lower than in more economically healthy times. Gallerist Thaddaeus Ropac said the pace of sales was “somewhat slower than last year” at Frieze Seoul (September 4-7), but it did sell work by the gallery’s latest charge, 81-year-old Korean artist Lee Kang-So (“The Wind Blows”, 2024, $180,000). 

More sales were reported from The Armory Show, now owned by the Frieze franchise, though with 235 exhibitors, this fair is twice as big as its Seoul event. Anne-Claudie Coric, executive director of Galerie Templon, found the fair “a remarkable concentration of New York energy” and reported sales by gallery artists Jim Dine, Alioune Diagne, Chiharu Shiota and Omar Ba (€50,000-€150,000). Oliver Durey, director of Larkin Durey, described the fair as “sustainable and well-tempered”, reporting sales between $18,000 and $110,000.

‘Les gardiens de la prairie’ (2024) by Marc Padeu at Larkin Durey © Courtesy Larkin Durey

Some galleries sold across both fairs, albeit at different price levels: Korea’s Johyun Gallery reported 10 works by its charcoal artist Lee Bae were sold at Frieze Seoul for $56,000 each, while three works by the same artist sold at The Armory Show for between $90,000 and $300,000.