UniCredit SpA has acquired a 9% stake in Commerzbank AG, elevating it to the position of the bank’s second-largest investor. This acquisition includes a 4.5% stake purchased from the German government, with the remainder acquired through market transactions, as confirmed in a statement on Wednesday.
The Italian bank’s new holding places it behind Germany, whose stake in Commerzbank has now decreased to 12%. UniCredit indicated it will seek regulatory approval to increase its stake above 9.9% if deemed necessary.
Currently, UniCredit owns Hypovereinsbank, a significant German financial institution. A potential takeover of Commerzbank could substantially enhance UniCredit’s influence in both corporate and retail banking sectors in Germany. This week, Commerzbank’s CEO Manfred Knof announced he will not seek reappointment after his term ends next year.
In a statement, UniCredit expressed its intention to explore value-creating opportunities with Commerzbank for the benefit of stakeholders in both banks. Although UniCredit had previously considered a full acquisition of Commerzbank, no formal offer was made. CEO Andrea Orcel has suggested that acquisitions may become more attractive if UniCredit’s share price continues to outperform competitors.
UniCredit paid €13.20 ($14.57) per share for approximately 53.1 million shares acquired from the German government, resulting in a total expenditure of €702 million. The government’s Finance Agency described UniCredit’s bid as a “significant outbid” compared to other offers.
The German government has imposed a 90-day restriction on further sales of Commerzbank shares, with certain exceptions. Finance Agency head Eva Grunwald stated that this partial sale marks a successful stabilization of Commerzbank and signifies the government’s exit from the bank.
UniCredit’s share price has increased more rapidly than Commerzbank’s over the past two years, leading to a tangible book value ratio of 1.05, which is approximately double Commerzbank’s ratio of 0.54, according to Bloomberg data.
Both Commerzbank and UniCredit have benefited from recent European Central Bank interest rate hikes, reporting record profits last year. UniCredit has notably increased shareholder payouts more than any other European bank, with an anticipated distribution of over €10 billion this year.
However, the positive momentum for European banks may diminish as the ECB begins to lower interest rates. Bank shares in the region have largely stagnated following the first rate cut of the year in June.
