UniCredit CEO Andrea Orcel was interviewed at the World Economic Forum (WEF) in Davos, Switzerland on January 18, 2024.
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UniCredit BankChief Executive Andrea Orcel revealed this week that the Italian bank holds a 9% stake in the company. Commerzbank –A takeover of the German rival is still possible.
UniCredit faces a series of hurdles before it can increase its stake after making a request “that could exceed 9.9% of Commerzbank if necessary”. Shares in Commerzbank soared on Wednesday following news of UniCredit’s stance and rose further on Thursday on speculation of an imminent takeover.
“All options are on the table,” Oser said in an interview with Bloomberg Television on Thursday. He stressed that “it would be very simple to engage with all the stakeholders and see if there is a basis for a merger. If not There is, that is the basis for sponsoring or driving Commerzbank further towards… transformation, then we will also bring a lot of value to our shareholders.
About half of UniCredit’s new stake was purchased from Commerzbank’s largest shareholder, the German government, which is seeking a gradual exit after injecting 18.2 billion euros ($20.05 billion) to support the bank during the 2008 financial crisis. its status. The authority retains 12% of the equity, said last week So far, approximately 13.15 billion euros in bailout amounts have been repaid.
All eyes are now on whether UniCredit will make that leap now that the German government has dumped shares on the market again.
“It is possible that the government will reduce its holdings further. We will be interested if the conditions are right,” Oser said on Thursday. “We could potentially buy on the open market. Or we could potentially do nothing. But we don’t have that flexibility unless we request authorization first.”
The Italian bank already operates in Germany through its Munich-based bank HypoVereinsbank. Analysts at Berenberg stressed in a report on Thursday that the Commerzbank acquisition would fit in with Orcel’s broader expansion strategy and create Germany’s second-largest bank, with a market share of about 8% of customer loans.
“UniCredit has always seen itself as a pan-European bank and its CEO wants to keep it that way,” they said. “Expanding operations in countries where it already has a presence is therefore consistent with this objective.”
UniCredit made a similar cross-border move last year when Acquired nearly 9% equity Alfa Bank took the stake from the state-owned Hellenic Financial Stability Fund, although the fund has yet to take further action against the Greek bank.
Until recently, Germany’s largest lender Deutsche Bank Deutsche Bank was seen as a leading contender to acquire Commerzbank after preliminary talks suddenly collapsed in 2019. .
UniCredit’s acquisition of Commerzbank would be a rare and long-awaited example of consolidation among Europe’s banking giants. This resource-intensive and time-consuming process is often hampered by regulatory hurdles and restrictions on large exposures.
However, David Benamou of Axiom Alternative Investments said Orcel was taking a stake in Commerzbank at “probably one of the best moments he could have”.
“It’s a great move from a financial perspective,” Benamou told CNBC’s Steve Sedgwick on Thursday.
He noted that Commerzbank has yet to confirm the authenticity of its shares as the shares rise. August stock buyback plan The plan involves the ECB’s first tranche of 600 million euros, accounting for about 3.3% of its market capitalization as of Thursday, meaning it does not yet fully reflect the German bank’s “very low” valuation.
Analysts at Berenberg added that a potential takeover of Commerzbank would “significantly” reduce the likelihood of UniCredit seeking domestic consolidation in Italy – where the bank has Withdraw from negotiations 2021 Partnering with Monte dei Paschi, the oldest bank in the world.
Furthermore, “UniCredit will have to deal with potential political and union opposition to the deal, which could limit the value extraction from the acquisition. Finally, because the combined entity will be a larger and more complex bank, it There may be more pressure.
Commerzbank is already looking to block potential takeovers, Reuters reportedFrank Werneke, chairman of Verdi, one of Germany’s largest trade unions, called on the German government to retain its stake in Commerzbank “until further notice to avoid a takeover,” according to Google Translate. statement.
— CNBC’s Ganesh Rao contributed to this report.
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