Andrea Orcel stunned Germany last week by raising UniCredit’s stake in Commerzbank from 9 per cent to 21 per cent in a manoeuvre that mirrored tactics made notorious in hostile takeover battles more than a decade ago.

When carmaker Porsche and automotive supplier Schaeffler Group came for German blue-chips Volkswagen and Continental in 2008, they built their stakes by stealth. Back then, there was no legal obligation to disclose positions built through derivative instruments that guaranteed access to shares only at a later point in time.

The loophole in EU disclosure rules has since been closed, making large-scale secret stakebuilding impossible.

For Orcel, a former M&A banker and now chief executive of UniCredit, the stricter disclosure rules for financial derivatives presented a different opportunity: UniCredit has been able to disclose a 21 per cent stake in Commerzbank while complying with rules that, for now, block it from owning more than 10 per cent.

“Think what you may but this is just beautifully done,” said one Frankfurt-based banker.

At the core of the trade is an arbitrage between two rule books.

Eurozone laws governing bank ownership and control mean no one can buy more than 10 per cent of a lender without first getting the green light from the European Central Bank.

Approval may be a formality for an EU-based bank such as UniCredit, which had already said it would seek ECB consent after acquiring its first 9 per cent stake. But the process can take months, which allows rivals to build their own positions, hedge funds to snap up shares and a target to buttress its defence.

However, ECB acceptance is only required for UniCredit to take control of voting rights attached to Commerzbank shares. The rules neither stop the Italian bank from gaining economic exposure to the target’s stock beforehand nor ban the signing of contracts now to receive the shares after central bank approval.

Disclosure rules for share ownership in the securities laws enacted after the Porsche and Schaeffler tussles have a different focus: they require an investor to reveal the position when it owns — directly or indirectly through derivatives — an economic interest in 5 per cent of the shares or when they hit higher thresholds, one of which is 20 per cent.

This discrepancy allowed Orcel to reveal a huge jump in UniCredit’s stake in Commerzbank, taking it from a minority investor to leapfrogging the German government as the single biggest shareholder. Its position is also big enough to make it difficult for potential competitors to make a counter-offer for the German bank, should it decide to pursue a takeover.

At the core of the transaction are contracts UniCredit entered with Barclays and Bank of America, according to voting rights disclosures and bankers familiar with the deals.

Both investment banks struck so-called total return swap agreements with UniCredit, in effect committing to replicate the economic performance of Commerzbank’s stock. If the German lender’s shares go up, or the bank pays its dividend, the counterparties will pay the change in value to UniCredit. If the stock goes down, UniCredit must cover the difference.

Barclays and BofA also committed to physically deliver the Commerzbank shares to UniCredit later, should the Italian lender still want them. While the banks have bought a few Commerzbank shares directly, they hedged their trade mostly through put and call options, according to disclosures.

Four people familiar with the deal say the two investment banks will each make €12mn in fees and other income on the trade, which has a notional value of €2.3bn. The income each bank stands to receive could rise to €40mn-€50mn if the contracts are extended beyond 2026 or otherwise modified, they said.

People familiar with UniCredit’s thinking said the fees were “far lower”, without elaborating.

“In itself, a total return swap is not a very complex transaction and relatively simple from a technical point of view,” said former senior Deutsche Bank derivatives trader Pius Sprenger.

But “applying it on such a large scale as in the Commerzbank case required a lot of determination”, said Thomas Schweppe, a former Goldman Sachs M&A banker and founder of Frankfurt-based investor advisory boutique 7Square.

And last week’s 11.5 per cent total return swap was far from the first step in Orcel’s pursuit of Commerzbank.

Preparations to acquire the German bank started back in 2023 when the Italian lender silently built a direct stake of just under 3 per cent, said two people with direct knowledge of the matter, hovering below the first disclosure threshold for direct holdings.

In August 2024, when rumours started to circulate that the German government may soon start selling down its 16.5 per cent stake, UniCredit acquired another 1.7 per cent through a much smaller total return swap, still sitting below the 5 per cent threshold for combined direct and indirect positions.

Then on the night of September 10, the Italian bank bought another 4.5 per cent from the German government when it outbid financial investors in a block trade, clearing the 5 per cent disclosure threshold for the first time and subsequently revealing its 9 per cent position. By September 23, it had converted the initial, smaller total return swap into shares.

On the same day, UniCredit entered two much larger total return swaps, relating to stakes of 5 per cent and 6.53 per cent, that will expire in 2026. A two-year exercise period — much longer than the expected six to 12 months timeframe for obtaining regulatory clearance — shows the Italian bank is “patient”, said one insider.

UniCredit negotiated the derivatives without external advisers, relying on in-house expertise, said people with knowledge of the situation.

UniCredit’s equity and credit sales and trading team is headed by derivatives specialist Salvatore “Chicco” Di Stasi, who joined from UBS last year and previously worked at Goldman Sachs.

“He has something that you don’t [often] find in a large commercial bank, nor in UniCredit . . . He is very, very creative as far as structuring is concerned,” one former colleague said.

Total return swaps can come with risks. During the 2008 financial crisis, large drops in VW and Continental shares left Porsche and Schaeffler Group exposed to huge losses when their derivative stakes lost billions of euros in value.

Orcel has eliminated that risk with another layer of financial engineering, said people familiar with the transaction. He is using a so-called collar to hedge the Commerzbank position against share price declines, while also waiving large parts of the upside.

The structure — consisting of opposing call and put options — in effect locks in last week’s Commerzbank share price.

The careful stakebuilding served to underscore Orcel’s seriousness about gaining control of Commerzbank despite political opposition.

Revealed days after the German government announced it was pausing sales of its remaining stake in Commerzbank in the wake of UniCredit’s initial stakebuilding, one insider said Orcel had used the trade to ask: “Can you hear me now?”

Another banker familiar with the deal said Orcel used the derivatives to “walk the talk”, with the position underpinning his verbal interest in Commerzbank.

Hedging the downside to the Commerzbank trade backs Orcel’s claim he could walk away from his pursuit of the German group, the banker said.

While such an announcement could lead to a steep fall in Commerzbank’s share price, UniCredit’s losses would be limited. Similarly, if a future deal with the German bank did go through, Orcel could take full possession of the underlying 11.5 per cent stake at its mid-September price without having to pay a meaningful takeover premium.

UniCredit’s trades have also made it far harder for potential rivals such as Deutsche Bank, BNP Paribas or ING to build a similar derivatives position in Commerzbank.

While Commerzbank is a highly liquid stock, close to a third of the total market capitalisation is tied up: 12 per cent is owned by the government, and 21 per cent is controlled by UniCredit.

As one German banker said: “For everyone else, mustering a counter bid has become quite a lot harder.”

Following Labour’s general election victory in July 2024, the party has been clear it wishes to kickstart economic growth, but to do that it “needs to encourage more investment”.

This is what Parmenion chief investment officer Peter Dalgliesh told Money Marketing while discussing the upcoming Budget on 30 October.

Chancellor Rachel Reeves background as a supply side economist “means she is always focused on investment”, Dalgliesh said.

Reeves used to be an economist at the Bank of England, where she worked on the central bank’s Japan desk. She also worked for HBOS, a UK banking and insurance company owned by Lloyds Banking Group.

However, in regards to the rumours circulating Labour could raise money through extra wealth taxes, Dalgliesh added: “If you put taxes up on those who can afford to invest, you will score an own goal.”

He is still optimistic looking forward though, due to wage growth and rising property prices.

Dalgliesh also feels the UK is a “pretty resilient country” irrespective of what is announced by Reeves on 30 October.

As a whole, from an investment point of view, he feels the UK is an “interesting market at this point in the cycle”.

He has seen in recent surveys that financial advisers want to increase exposure to the UK. Additionally, the Bank of America releases a quarterly survey that showed institutional managers wish to do the same.

Dalgliesh also touched on the ongoing pensions review launched by Labour, which he hopes will result in the minimum of auto-enrolment to be raised and that UK pension funds will start to invest in “our own market”, the UK.

He said France, Italy, US and Australia all do this, but the UK is an “anomaly”.

Still, Dalgliesh is “sympathetic” for the new government as he believes everyone got a “bit ahead of themselves in our anticipation” following the general election result.

“Let’s see what happens when they take their time.”

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The FT is seeking entries for its fourth annual list of Africa’s fastest growing companies, which will be published in May 2025. 

In partnership with data provider Statista, the FT aims to identify companies with the strongest revenue growth between 2020 and 2023. The ranking will appear in a special report published in a weekday edition of the newspaper and on FT.com, alongside articles by FT correspondents on trends identified in the research. 

Entries will highlight, not least, the type of companies that have performed well in spite of the difficulties induced by the Covid pandemic. Our previous rankings indicated the growing body of African businesses achieving a healthy increase in revenues.

Potential candidates for the next list can forward their names via this website. Others will be contacted by Statista.

The deadline for submission of entries is January 31, 2025.

Why should companies participate?

New business opportunities

Inclusion in the ranking is a visible and public acknowledgment of a company’s performance that extends beyond its specific industry and country. It may also generate attention from potential partners, customers and worldwide investors.

Reputation 

Corporate growth usually generates demand for new employees. Being featured in the ranking will increase awareness of you as an employer, and of your potential. 

Effective media coverage 

Reporters will write about standout companies, specific sectors and business trends in Africa. The ranking will be published in a print report in an FT weekday edition and the full rankings will appear online. 

Employer branding 

Companies included in the list may use the award logo for marketing purposes upon payment of a licence fee. Companies can still publicise the award free of charge if they do not use the official label.

Which companies are eligible? 

To be included in the ranking, your company must meet the following criteria:

• Revenue of at least $100,000 generated in 2020¹; 

• Revenue of at least $1.5mn generated in 2023¹; 

• A independent company (not a subsidiary or branch office of any kind);

• Headquartered in an African country. 

 ¹ Countries that do not use the dollar to express revenues should provide average local currency value equivalent over the course of the relevant fiscal year 

How do I register? 

1. Online registration 

Please register with Statista by January 31 2025. Alternatively, download this form and send it to ft-africa@statista.com upon completion. 

 2. Verification of revenue information 

Your revenue data must be verified using this form. The form must be signed in person by a managing director or a member of your executive committee (chief executive or chief financial officer) and emailed to Statista by January 31, 2025 at ft-africa@statista.com. 

All downloads 

In English

In French 

Please email ft-africa@statista.com with any additional questions.

This is an audio transcript of the Working It podcast episode: ‘Amazon ends remote work. Will other firms follow?’

Kevin Delaney
I think if you look at Amazon specifically, this is not a lay-off. But if you tell people that they need to come in to the office five days a week, you have to expect that you’re gonna lose some number of workers.

[MUSIC PLAYING]

Isabel Berwick
Hello and welcome to Working It from the Financial Times. I’m Isabel Berwick.

[MUSIC PLAYING]

Many of us take flexible and hybrid work for granted. We just accept it’s here to stay. But not at Amazon. In September, the company’s CEO, Andy Jassy, told staff they’d have to work in the office five days a week from January. He may not be alone. A new survey of CEOs carried out by KPMG shows that 83 per cent of them expect a full return to the office in the next three years. So is Amazon’s new policy on remote work a harbinger of what’s to come? Will we all be back in the office five days a week, like we used to before the pandemic? To find out, I’m going to speak to Kevin Delaney, the editor-in-chief of Charter, a media and research company focused on the future of work, and to my friend and colleague, Emma Jacobs. Let’s get started.

There’s been one topic of conversation this week in offices about offices. It’s Amazon CEO Andy Jassy’s memo to staff ordering them back to the office five days a week. Emma, how has that been received internally and externally? You wrote a very well-read column about it.

Emma Jacobs
It is the topic that will never die. I find that anyone you meet is happy to talk about how many days a week they go into the office. But people have positions on it and it’s a way of flexing muscle and looking like you’re a strong leader, characterising the other side as kind of pathetic and all these other things. So it’s become a kind of political potato that people throw between two sides. I’m surprised at how horrible people are about it, really.

Isabel Berwick
Yeah. Kevin, are you surprised by the enduring fierceness of this debate?

Kevin Delaney
Yeah, I am surprised. You know, we’re four-plus years in here and we’re still talking about this. The research is pretty clear that hybrid working — so in the office two or three days a week — leads to more engaged workers. People are more productive. It’s better kind of all around.

And then you have these CEOs who in the face of that don’t have particularly good arguments for why people should be in the office five days a week in the chair, 9-to-5. This is against the backdrop of a workforce that we know from surveys is pretty disenchanted and disengaged. You know, the research shows that a third to 40 per cent of workers actually, given the opportunity, think that they’re gonna look for a new job over the next year.

So it’s that kind of fraught context and the hassle of commute that are reasons, important reasons why this issue continues to be one we’re talking about.

Isabel Berwick
Is it that no one’s telling the CEO they’re wrong? Are they surrounded by yes people?

Kevin Delaney
I think that is probably an issue. The question is whether they’re being told or whether they’re hearing it. And, you know, I think one of the issues is that there are groups for whom hybrid working is particularly welcome. That includes caregivers who are often women employees of colour; there’s lots of research about that.

And that’s not the profile of your average CEO. You know, the average CEO is older than the average employee. So they’re arguing from another era and another demographic perspective. And as a result, there’s a real disconnect there that we’re seeing playing out with this issue.

Isabel Berwick
So, Emma, I wanted to bring you in here because you commented in your FT column that some HR chiefs are under pressure from the CEO to see more physical presence on site due to personal preference or nostalgia. And there’s a great reader comment under that from someone called Forward: “It’s 99% of the explanation. CEOs tend to be extroverts and insecure overachievers who need to see people physically to feel good and to be validated all the time. Of course they want people in the office full time. Many genuinely fail to grasp that an introvert might be more productive at home without the pressures of socializing.”

So is it nostalgia?

Emma Jacobs
It is. I do think that it is. One of the problems of getting older is giving up on the idea that just because you’ve been through something, you have to impose it or it’s the right way to be for younger generations or different kinds of workers.

I got an email from somebody on the back of the column that said, you know, they had been ordered in by a manager because it was good for talking to people. And then when they came in, nobody talked to this person. So it was sort of like wish fulfilment rather than kind of, you know, really kind of getting to grips with what’s going on somewhere. I think one of the biggest frustrations . . . I don’t care if Amazon wants to bring people in five days a week, if they know for sure that that will work better for their workforce.

All sorts of factors play into it, but it’s the lack of evidence that seems so weird in companies that are so keen to talk about meritocracy or talk about sales as being the kind of driving force of how we judge things. And then when it comes to this thing that they’re so desperate to implement, there’s very little in the way of data. And it just does seem odd. Is there like a kind of feeling or a vibe that they want to create?

I just find it very disappointing, really, when they look at the office and say, why is nobody coming in five days a week? They don’t tend to ask anybody. So why are they not asking the people that aren’t coming in? They might have all sorts of good reasons.

Isabel Berwick
Yeah. Kevin, you do a lot of research. What does your research say works?

Kevin Delaney
I mean, the research is really clear in, two or three days a week in the office with your team is a recipe for the most productive, engaged, loyal workforce.

Another thing we know is that periodic off-sites with your team or something like that sort of team gathering actually make a really big difference for distributed teams. And there’s something like a four-month trust halo if you actually spend some concentrated period of time with your team, which research suggests is about half-social and half-professional time.

And so we’ve learned over the last few years the best practices for managing teams like this. And when I hear companies say that workers need to be in the office five days a week, it ignores the fact that workers could be in a hybrid configuration, which is two or three days a week. But it also is, in my view, pretty lazy because it means that they’re not engaging with what the best practices for management in 2024 are, not in 2018 or 2008 or 1998. And that feels like what this whole CEO reflex reflects.

Isabel Berwick
Yes. So the data’s obvious. So why are these leaders not engaging with the data?

Kevin Delaney
I would say there’s one element — and I don’t know this to be true in Amazon’s case — but if you look at tech companies generally, there are lists of lay-offs and there’ve been waves and waves and waves of lay-offs this year by companies that we think of as being among the leading tech companies.

And part of it is they feel like they overhired, you know, during the pandemic and they’re getting rid of some people. And part of it is their practice is just to continuously lay off parts of their company and then hire people who are AI engineers or whatever the next thing they feel they need is.

And so I think if you look at Amazon specifically, this is not a lay-off, but if you tell people that they need to come in to the office five days a week, you have to expect that you’re gonna lose some number of workers. And I’ve seen estimates that this could be somewhere north of 10 per cent of workers who decide to stop working for Amazon because it just doesn’t fit with their lifestyle or the sort of work environment that they want.

And so, you know, there is one critical view of this, which is some CEOs are using this to trim your staff without having to pay severance to people who leave. And what we know from other research in the tech industry specifically is that when you require people to be in the office 100 per cent of the time, it’s the more experienced, longer-tenured workers who tend to leave companies. Researchers have studied this. And so, you know, one way to view this is it’s a way to shed your most expensive staff without having to pay severance.

Isabel Berwick
I mean, certainly on LinkedIn, the prevailing view seems to be that this is a lay-off by stealth. Emma, is that what you’ve been hearing?

Emma Jacobs
I mean, those . . . without knowing Andy Jassy’s inner mind, I mean, he did say in his memo that he wants to lose a layer of management because he talked about meeting bloat — the pre-meetings for the pre-meetings and so on.

So I think that, you know, he didn’t make the connection himself; I think that would be a step too far. But I’d be surprised if he wasn’t using it as a way of doing so, as Kevin says.

Isabel Berwick
Yeah. And on a related topic, I think one of the interesting side effects or the post-pandemic effects has been a bump in women’s ambition and women’s promotion at work. Are we starting to see that women are losing out? A five-day-a-week mandate is gonna affect a lot of women and caregivers, isn’t it?

Emma Jacobs
I mean, I guess that . . . on a general level, people are being much more pragmatic than these kind of headline-making stories suggest. So there is more flexibility, I think, generally across companies. The pandemic has taught most organisations that flexibility works both ways.

And so I think that although there is a kind of creep with companies like Goldman Sachs or Boots saying that they want people back in the office, generally there is more flexibility and I think that is allowing people with caring responsibilities to manage their days better. But I think that if we do go back to the office five days a week, long hours in the office, you know, the kind of greedy job scenario, then it is gonna be difficult for women that have traditionally taken on more of the caregiving role.

Isabel Berwick
Yeah. Kevin, are you hearing from groups of workers who are worried about this sort of trend?

Kevin Delaney
Yeah, in the US context also, caregiving is in a real crisis. And so people would have caregiving responsibilities, which if you look not just about early child care, but also elder care and all the different dimensions this can take is actually a very significant part of the workplace. There’s very little support for them and removing flexibility for this population means that you’re gonna lose some of them.

And so I think, you know, if you require people to be in the workplace five days a week, the profile of your workforce is likely to include fewer caregivers, also fewer people of colour. It’s a less diverse and less caregiving workforce, which, you know, is a choice that organisations could probably make but it’s not one that the research supports as being the best recipe for long-term performance of organisations if they’re so homogenous.

Isabel Berwick
Is there some way in which this plays tangentially into what we might perceive as the retreat of diversity, equity and inclusion in American workplaces, Kevin?

Kevin Delaney
I think that it plays into a relatively looser labour market. So we’re seeing it in all sorts of numbers, and the number of people quitting their jobs voluntarily has dramatically reduced. We’re seeing the number of open jobs that are not filled, dramatically reduced also. And the result is that employers actually feel that they’re emboldened in this sort of balance of power with employees. And so they can kind of . . . People will have to basically just go along with the policies that the CEO wants for fear of losing their jobs and not actually having great confidence that they would be able to find another job.

So I think I would say that that’s the bigger demographic trend. The broader trend is sort of emboldened employers who are also either underfunding or being more quiet about any DEI initiatives. They just have more leeway to do things like that, given the current state of the employment market, which I think is a very short-term thing, because we know probably unless AI dramatically changes things in the next few years, there will once again be a more acute shortage of labour.

Isabel Berwick
Yeah. And on the AI piece, I wanted to read out a comment from someone called London Reader under Emma’s article: “One of the most interesting aspects of these WFH/RTO discussions is the absence of commentary on how significantly the technology has moved on over the last 5 years. It is almost never cited in these discussions, which all seem to suggest this is just some kind of culture war. Depending on the kind of work you do, many of the collaborative computerised tools now available probably make you more productive when you’re sitting in an online meeting rather than in the office. But instead most of the debate seems to be centred around what the ‘good old days’ were like.”

Why aren’t we talking about tech?

Kevin Delaney
I think it’s a really good question. And the just basic fact is that we shifted to pretty much fully remote using technology that wasn’t necessarily ready for it. And actually, companies did well and were just as productive and showed that we could operate that way. We are now four years into this, and the technology as we all know, has evolved. Our level of comfort with it, the mores and practices around it have developed.

And so I think it is a real blind spot. And I think part of the premise of the CEOs calling people back in the office is that, you know, there’s this great interchange of ideas and there’s the water cooler where people bump into other people. And the truth is, like, the research shows that a lot of that was never actually true. And if you weren’t sitting within 20ft of someone in your office, you barely interacted them, water cooler or not. So a lot of that is this sort of nostalgic.

But technology can be deployed, you know, in some ways even better than relying on some random water cooler encounter that is probably not gonna happen. There are tools and technology that actually can enable even that part of it.

Isabel Berwick
We haven’t touched on Gen Z and their preferences for work-life balance and boundaries. Emma, are Gen Z gonna do for return to office mandates? Is the demographic pressure gonna be in favour of the younger workers?

Emma Jacobs
It all slightly depends on whether, you know, who holds the power. And, you know, Gen Z could like . . . Whatever they want to have, you know, unicorn rides or whatever they want. But, you know, it depends on who’s paying and who’s willing to do it.

Isabel Berwick
Yeah. Kevin, what are you hearing about Gen Z?

Kevin Delaney
Yeah, I think you know, what Emma said, a lot of their data are like fairly contradictory. And I think one thing to think about is a lot of Gen Z workers, my sense from the research is that they are looking for opportunities to learn, to connect with their colleagues, to socialise, to be mentored. And part of that disconnect is that when they’re going into the workplace, they’re actually not experiencing that.

So they’re commuting in and then they’re on zoom calls and these older colleagues, who in theory are supposed to be mentoring them, are not actually doing that. And so I guess what I would say is that you, again, like a sort of hybrid set-up that has deliberate structured approaches to things like connecting people with their colleagues to build trust and engagement and actually mentoring and learning and teaching as part of the time that you spend in your office. That seems like the thing that everybody wants, regardless of generation.

Isabel Berwick
I mean, that is one thing that drives me insane about this whole discussion is this idea that I know that the apprenticeship model where you hear, overhear a lot of how to conduct yourself in meetings or how to learn how to talk on the phone or all these things, you know. It’s so lazy. It’s like the easiest thing to do. I don’t have to invest in your mentoring or your training. All you have to do sit next to me. I mean, it’s the most pathetic thing. Drives me mad. OK, I’m gonna wrap it up. Kevin, to bring it back to Amazon, do you think this move says more about Amazon and how it manages its workforce and about the future of hybrid work? You know, is this a harbinger or an outlier?

Kevin Delaney
So I think if you look at the data about hybrid work, the population that is in a hybrid configuration of workers has actually been pretty flat. And so the data don’t suggest that such a wave has started already. And the question now is whether Amazon and others, sort of embolden other CEOs to try and enforce such mandates.

Amazon is known within the tech industry as a company that compensates its workers very well, but has a culture that’s more hard-driving, less flexible, less worker-friendly in some ways. And so it’s not surprising or inconsistent with that, that Amazon would be really sticking its neck out on this. And that suggests to me that it’s not necessarily an indicator that so many companies will be following Andy Jassy.

Isabel Berwick
Kevin, thank you so much for joining us from New York.

Kevin Delaney
Thank you, Isabel. Thank you, Emma.

Isabel Berwick
And Emma, thank you.

Emma Jacobs
Thank you. Nice to speak to you, Kevin

Isabel Berwick
It’s too early to say whether the tide is really turning on remote work. And as Kevin said, there’s a big difference between saying people have to work in the office and actually getting them there. But employers are in a better position to call the shots this time around. So maybe don’t block book that 2pm yoga class just yet.

This episode of Working It was produced by Mischa Frankl-Duval. The executive producer is Manuela Saragosa, and Cheryl Brumley is the FT’s global head of audio. Thanks for listening.