The end of the coalition government has implications for Commerzbank. Political resistance to a takeover of Germany's second-largest publicly traded bank by Italy's Unicredit is likely to diminish. While the German government, with its remaining 12% stake in the bank, could have played the role of a mini- white knight, that now looks less likely.

Although the government stated it would not intervene in any takeover battle, Chancellor Olaf Scholz (SPD) sharply criticised Unicredit’s move. For his usually moderate temperament, he had an outburst in late September, referring to the plans as a „hostile takeover“, and condemning the „unfriendly“ and „aggressive“ methods made without any consultation.

It came as a surprise to the government that Unicredit, after purchasing 4.5% of the bank from federal ownership for around 700 million euros via a bookbuilding process, announced that it now had a 9% stake. It then announced that derivatives transactions had increased this to 21%.

The unions raised the alarm – something that is unwelcome for the SPD. Former state secretary Florian Toncar (FDP) and the Federal Ministry of Finance, which was closely involved in the transaction through the Finance Agency, faced embarrassment on the financial markets. Not good for the FDP. Afterwards, the ministry remained vague: Finance Minister Christian Lindner (FDP) merely stated that any takeover was primarily a matter for management. Legally, this is correct. But support for the move would have looked different.

Lindner is now history as a minister. When it was rumoured in Berlin that Chancellor Scholz’s economic advisor, Jörg Kukies (SPD), might have been pulling a few strings for Unicredit, the now Finance Minister spoke similarly critically as the Chancellor: „Hostile takeovers are not what we need for stable banks", he said.

Since 11 September, a 90-day period has been running during which the government has committed to a restriction on any further selldown of its stake in Commerzbank. Little will happen until after the elections on 23 February. The steering committee of the state secretaries that decided on the sale was led by Toncar, who has now left along with Lindner. Sven Giegold (Greens) is leaving his position at the Ministry of Economic Affairs to move to a party position. The state secretaries in the Ministry of Justice have also left their posts.

It is unlikely that a future Chancellor Friedrich Merz (CDU) would protect Commerzbank. Cross-border mergers in the European banking sector fit into his worldview. The workings of financial markets and Banking Union are not foreign concepts for Merz. The government has previously expressly stated that it wants to withdraw from its stake in the bank, which it acquired during the financial crisis. Additionally, while privatisation proceeds do not help in meeting the requirements of the debt brake – they are considered a neutral exchange of assets – they still bring money into the state treasury.