German union appeals to Berlin to prevent Commerzbank sale to UniCredit

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By Tom Sims

FRANKFURT (Reuters) -A German bank staff union on Thursday called on Berlin to prevent UniCredit from buying Commerzbank, warning of massive job losses if a deal goes through.

The warning by the DBV union comes days after the Italian bank announced it had bought a 9% stake in Commerzbank – from the German government and the open market – and its leader said he would be keen to explore a merger.

The German government, which still owns a 12% stake in Commerzbank, will play a key role in whether any deal can take place.

The union said Berlin has a “special responsibility” to preserve jobs rather than cash in on its remaining holding in Commerzbank.

“Berlin still has the opportunity to pursue a sound industrial policy at Commerzbank and to preserve many thousands of jobs – as a sensible investment in the future,” DBV said in a statement.

German Finance Minister Christian Lindner, whose ministry manages the government’s Commerzbank holding, said on Thursday that the government does not want to stay permanently invested in a bank.

The government does not currently plan further sales of the bank, sources told Reuters, and Commerzbank has asked the government to retain its stake for now.

Commerzbank, with more than 25,000 business customers, almost a third of German foreign trade payments and more than 42,000 staff, is a linchpin of the German economy, Europe’s industrial motor.

The Italian takeover interest has already prompted a backlash and is an embarrassment for the German government, which appeared to have sold part of its stake without realising that UniCredit would snap it up.

UniCredit’s swoop is the most ambitious attempt yet at a pan-European bank merger but it faces considerable political hurdles in Germany.

The discussions about a takeover are unfolding at a delicate time. The coalition government, one of the most unpopular in recent history, is preparing for national elections next year.

(Reporting by Tom Sims; additional reporting by Christian KraemerEditing by Madeline Chambers, Emma-Victoria Farr and David Gregorio)