The headquarters of Commerzbank AG, in the financial district of Frankfurt, Germany, on Thursday, September 12, 2024.
Emanuele Cremaschi | Getty Images News | Getty Images
Italy’s UniCredit said on Wednesday it has increased its potential stake in the company Commerzbank up to 28% using further derivatives as markets wait to see whether they will take the plunge with a buyout of the German lender.
This is an increase from a previous position of 21%.
Italy’s second-largest bank said its ownership now consists of a direct stake of 9.5% and around 18.5% through derivatives.
UniCredit has applied to the European Central Bank for permission to acquire a stake of up to 29.9% in the German bank, while CEO Andrea Orcel is simultaneously pursuing a bid for Italian competitor Banco BPM.
“This move reinforces UniCredit’s view that there is substantial value within Commerzbank that needs to be crystallized,” UniCredit said in a press release on Wednesday. “It reflects the belief in Germany, its companies and communities, and the importance of a strong banking sector in driving Germany’s economic development.”
The lender emphasized that its position remains “exclusively an investment” at this time and does not affect its 10 billion euro offer for Banco BPM. Analysts believe Orcel could further tighten its bid and introduce a cash component to pursue domestic consolidation. In a statement accompanying Banco’s BPM bid in November, UniCredit noted that such a merger would serve the country to “consolidate its competitive position and expand its presence in Italy”, where it ranks second after Intesa Sanpaolo.
UniCredit has not yet warmed up its German takeover target and the Berlin government to a possible deal. Commerzbank said on Wednesday that it has “taken note of the announcement” but declined to comment further on the strategy, which is currently being upgraded and will be announced on February 13.
The German government has so far resisted Orcel’s courtship of Commerzbank, but is facing its own turbulence after the collapse of the ruling coalition and the loss of a vote of no confidence by Chancellor Olaf Scholz earlier this week paved the way for elections in February. The German government will retain a 12% stake in Commerzbank after divesting a 4.5% stake in September in a bid to exit its position in the lender it rescued during the 2008 financial crisis.
A merger with Commerzbank in Germany, where UniCredit operates through its HypoVereinsbank division, could create synergies in the capital markets, advisors, payments and trade finance businesses, analysts have previously indicated.
UniCredit shares rose 1.1% at 9:44 a.m. London time, while Commerzbank shares rose 3.1%.
— CNBC’s Greg Kennedy contributed to this report.