Italy’s UniCredit is making headlines once again as it announces an increase in its potential stake in Commerzbank, a German lender. The move, which raises its stake to 28% using derivative instruments, has sparked speculation about whether UniCredit will proceed with a full buyout of the bank.
This latest development represents a significant jump from UniCredit’s previous 21% holding in Commerzbank. The Italian bank now holds a 9.5% direct stake in the German lender, with the remaining 18.5% held through derivative instruments. UniCredit has also applied to the European Central Bank for permission to acquire a stake of up to 29.9% in Commerzbank, as CEO Andrea Orcel concurrently pursues a bid for Italian peer Banco BPM.
In a press release, UniCredit emphasized that its increased stake in Commerzbank is solely an investment at this time and does not impact its 10-billion-euro offer for Banco BPM. Analysts speculate that Orcel may consider sweetening the bid for Banco BPM and introducing a cash component to facilitate domestic consolidation. UniCredit views a potential merger with Banco BPM as an opportunity to consolidate its competitive position and expand its presence in Italy, where it currently ranks second to Intesa Sanpaolo.
While UniCredit has expressed its belief in the value of Commerzbank, the German lender has remained cautious in its response. Commerzbank stated that it has “taken note of the announcement” but refrained from commenting further until its strategy update on February 13. The German government, which holds a 12% stake in Commerzbank, has previously opposed UniCredit’s advances towards the bank. However, recent political developments in Germany, including the collapse of the ruling coalition and Chancellor Olaf Scholz’s loss of a no-confidence vote, have created uncertainty around the government’s stance on the matter.
A potential merger between UniCredit and Commerzbank could lead to synergies in capital markets, advisory services, payments, and trade finance activities. Analysts have highlighted the strategic benefits of such a combination, particularly in the German market where UniCredit operates through its HypoVereinsbank division.
Following the announcement, UniCredit’s shares rose by 1.1% in London trading, while Commerzbank’s stock saw a 3.1% increase. The market will be closely watching for further developments as UniCredit navigates its dual pursuit of both Commerzbank and Banco BPM.
This article was contributed by CNBC’s Greg Kennedy.
