Commerzbank headquarters in the financial district of Frankfurt, Germany, on September 12, 2024.
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UniCredit said on Monday it had increased its stake in the German bank. Commerzbank The company has increased its stake to about 21 percent and has submitted a request to increase its stake up to a maximum of 29.9 percent.
The Italian bank said in a statement on Monday that it had acquired an additional stake in Commerzbank through a financial instrument. Earlier this month, UniCredit said it had acquired a 9 percent stake in Commerzbank and confirmed that half of that stake was acquired from the German government.
“UniCredit is confident that it can unlock significant value, both from Commerzbank alone and within UniCredit, for the benefit of Germany and the bank’s broader stakeholders. However, as in the case of UniCredit, action is needed to materialise such potential,” the bank said on Monday.
The bank added that it had hedged most of its exposure to Commerzbank to give UniCredit “full flexibility and option to maintain its shareholding, sell its shares below the floor price or further increase its shareholding.”
The bank said its next moves would depend on engagement with Commerzbank’s management and supervisory board, as well as “a wide range of stakeholders in Germany”.
Berlin has been Commerzbank’s biggest shareholder since injecting 18.2 billion euros ($20.2 billion) into the bank to bail it out during the 2008 financial crisis.
German government officials met last Friday to discuss the state’s stake in Commerzbank. Officials concluded the bank is a “stable and profitable institution” and “strategically moving towards independence.” The federal government will follow suit by maintaining its shareholding until further notice, the bank said in a Google-translated statement.
Commerzbank shares fell sharply at the open on Monday on the news, but pared losses after UniCredit said it had increased its stake and applied to make a further acquisition.
As of 11:50 a.m. London time, Commerzbank shares were down 0.4 percent, while UniCredit shares were down 2.3 percent.
The government is likely to play a key role in any takeover of Deutsche Bank. Reuters reported last week that UniCredit Chief Executive Andrea Orsel told local media that “it would be an aggressive move” for the company to launch an unsolicited tender offer to buy out other investors in Commerzbank.
Orsel also cited the German government’s “confidence” in Italian banks as the reason it was able to buy the state’s 4.5 percent stake in Commerzbank.
UniCredit noted on Monday that it has operated in Germany for about 20 years and stressed that a “strong banking union” in Europe is key to the success of the European economy.
Analysts hope UniCredit’s move will encourage cross-border consolidation in Europe’s banking sector, which appears more fragmented than its U.S. counterpart.
