UniCredit takes stake in Commerzbank, fuelling tie-up talk

Commerzbank shares soared Wednesday after Italian bank UniCredit acquired a nine-percent stake in Germany's second-biggest lender, half of it from the German state, fuelling speculation about a potential takeover.

Italy's second-biggest bank paid around 1.4 billion euros ($1.5 billion) for the acquisition.

Half the shares were sold by Germany's finance agency, which has started reducing a stake it bought in Commerzbank during the financial crisis, with the rest purchased on the open market.

UniCredit hinted it was keen on increasing its holding, saying it would seek permission from regulators to expand its stake above a certain level in Commerzbank "if and when necessary".

The Italian bank said it would engage with the German lender "to explore value-creating opportunities for all stakeholders in both banks".

The surprise move sent Commerzbank's shares up more than 16 percent on the Frankfurt Stock Exchange, and renewed speculation the Milan-based bank is mulling a takeover of the German lender.

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UniCredit's shares were up about 0.7 percent in Milan.

The Italian bank had reportedly considered trying to take over Commerzbank in 2019 when the German lender was in talks about a potential merger with crosstown rival Deutsche Bank.

The talks between Germany's two biggest banks eventually collapsed.

Commerzbank said UniCredit's stake acquisition was "testament to the progress made" at the bank, adding it would "continue to act in the best interest of all our shareholders and our key stakeholders".

Financial crisis rescue

It did not comment on the possibility of further moves by its Italian peer.

But the Financial Times reported that Commerzbank is open to talks about a potential tie-up with UniCredit, citing people familiar with the discussions.

However, a takeover of a major German lender by an Italian bank could prove politically sensitive.

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After the stake sale, the German finance agency said a 90-day "lock-up period" was in place, during which no more shares could be sold, and stressed that "the federal government remains Commerzbank's largest shareholder".

Government spokesman Steffen Hebestreit refused to comment when asked at a press conference in Berlin whether Chancellor Olaf Scholz would have any objections to UniCredit taking over Commerzbank.

The German government announced Tuesday the sale of the 4.5-percent stake in Commerzbank, its first step in reducing its holdings in the bank, leaving it with 12 percent.

Berlin had bailed out Commerzbank with billions of euros in 2009 after the global financial crisis pushed it to the brink of collapse.

The finance agency announced last week that it would begin selling down its stake as Commerzbank's "economic situation has been steadily improving".

Commerzbank has bounced back strongly from its near collapse, posting its best annual net profit for 15 years in 2023. It is aiming for even better results in 2024 despite expectations of lower interest rates.

Source: AFP