Unicredit Bank Acquires 9% Stake in Commerzbank

Europe’s banking sector witnessed another merger with German’s Federal Government announcing that it has sold part of its stake totalling 4.49% that it holds in Commerzbank, to Italy’s Unicredit Bank for $773.43 million. Unicredit Bank has purchased an additional 4.5% on the open market taking its shareholding to around 9%.

The German Government has 16.49% of the Financial Market Stabilisation Fund (FMS) and of this, it has sold 4.49% to Unicredit Bank (around 53.1 million shares) sold via a market-standard accelerated book-building process.

As a result of a significant outbid of all other offers within the accelerated book-building, the entire package was allocated to UniCredit Group. At $14.54 per share, the allocation price was higher than the daily closing price of $13.88 per share. Both – Commerzbank and Unicredit Bank – are second biggest lenders in their respective countries.

Eva Grunwald, member of the Executive Board of the German Finance Agency Finanzegentur said that Commerzbank has shown to be standing firmly on its own feet again.

“This first partial sale of the Federal government’s stake heralds the completion of the successful stabilisation and thus the exit of the Federal government,” Eva added.

The sale reduces FMS’ holding to 12%. The Federal government remains Commerzbank’s largest shareholder and has committed to a 90-day restriction on sales with certain exceptions.

Confirming that its stake in Commerzbank was around 9%, Unicredit said that it would explore value-creating opportunities for all stakeholders in both banks and was taking regulatory steps to further increase its holding, rekindling speculation it may be interested in a full takeover of the German bank.

“UniCredit will submit regulatory filings for authorisation to potentially exceed 9.9 per cent of Commerzbank if and when necessary,” the bank said.

Sale Opposed

However, the sale of FMS stake in Commerzbank was opposed by the United Services Union (ver.di)

Chairman Frank Wernecke, who wanted the Federal government to retain its stake in Commerzbank until further notice in the foreseeable future to prevent a takeover.

He appealed to the Germany’s Finance Minister Christian Lindner to make a clear commitment to Germany as a business location, oppose the impending takeover of Commerzbank by UniCredit and should not sell any more shares in Commerzbank.

He said that the Federal government must take responsibility for maintaining Commerzbank as one of the large private commercial banks in the country. The past few years, with the COVID-19 crisis and the consequences of the war in Ukraine, have made it clear how vulnerable Germany has become as a business location.

“Financial decisions in particular play a decisive role in promoting the economic structure and preserving jobs at home. This can only be achieved with strong banks in our own country. It must stay that way,” he said.

It may be recalled that UniCredit, BNP Paribas and Dutch-based ING Groep approached the Federal Government in Germany in 2018 but the latter refused to sell its shares.

Unicredit’s CEO Andrea Orcel previously indicated his intention to pursue mergers and acquisitions (M&A) to strengthen the bank’s position in Europe. Most rumours about potential deals are true, he said a few months ago.