UniCredit has increased its stake in Commerzbank from around 9% to 21%, a move that appears to mark a sharp escalation in tensions between the Italian bank and the German government. Chancellor Olaf Scholz has declared Berlin’s opposition as a “hostile attack” that is not good for the banks. The Italian bank’s move comes two weeks after it revealed it had a 9% stake in Commerz – half of which was acquired by the German government – catching the country’s establishment by surprise. Berlin said last Friday it would not sell its remaining 12% stake, in an apparent reversal of a plan set out earlier this month to gradually reduce its stake.
Now UniCredit, which has long courted Commerzbank as a takeover target, needs ECB approval to raise its stake above 10%, and the latest deal will not be completed until “approval requests have been received”. However, if approved, UniCredit would overtake Berlin as Commerzbank’s largest shareholder, increasing pressure on the German government. The market appears to be unhappy with the deal: UniCredit is set to close down more than 3%, while Commerzbank shares fell 0.67% before Scholz’s statement. They have since closed down nearly 6%.
The Italian bank has also filed a request to increase its stake in Commerzbank to 29.9%. A merger between the two groups would be the first significant cross-border banking transaction in Europe since the financial crisis and a potential catalyst for further consolidation in the sector, notes the Financial Times. Unicredit’s move towards Commerzbank, recalls the FT, has agitated German politicians and unions who oppose a full takeover: sources close to Berlin also said that opposition to the possibility of a takeover by UniCredit is growing stronger, as the German bank is seen as strategic, since it provides a large part of the Mittelstand’s loans and is also responsible for a large part of export financing. Other sources close to the case stressed that there is no intention on the part of Unicredit to take actions that could be considered hostile by the German government.
Source: IL Tempo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
