UniCredit buys Commerzbank stake from Germany, rekindling takeover speculation

By Giulia Segreti, Valentina Za and Tom Sims

FRANKFURT/MILAN (Reuters) -Italy's UniCredit said on Wednesday that it had acquired a 9% stake in Commerzbank and will seek approval to potentially buy more, in a move that raised the prospect of CEO Andrea Orcel preparing to take over the German lender.

UniCredit bought almost half of the stake by bidding for shares offered by the German government to reduce its holding in Commerzbank, and acquired the rest on the market, the Italian bank said in a statement.

UniCredit made a "significant outbid of all other offers" during the book building, the German government said in a statement. The bank paid 13.20 euros ($14.58) per share, above the daily closing price of 12.60 euros, the government said.

Commerzbank shares jumped 17% in early trade, while UniCredit shares were up 1.3% at 0815 GMT.

The purchase by Italy's No. 2 bank of the stake in Germany's No. 2 lender makes UniCredit one of Commerzbank's largest shareholders and follows speculation in recent years that the Italian lender could be interested in buying the German bank.

UniCredit, which is flush with excess capital after a surge in profits in the past two years, said it would "explore value creating opportunities for all stakeholders in both banks".

"UniCredit will submit regulatory filings for authorization to potentially exceed 9.9% of Commerzbank if and when necessary," the bank said.

Commerzbank did not immediately respond to a request for comment.

European bank executives and regulators have long wanted to consolidate Europe's fragmented banking market through cross-border mergers but have complained of major hurdles to mega deals. Takeover talk has often fizzled.

"At first glance, we think a full takeover of Commerzbank could make financial and strategic sense for UniCredit, and UniCredit has been clear that it is looking for M&A targets," analysts with KBW said in a note.

The German state has held a 16.5% Commerzbank stake through its bank rescue fund as a result of a bailout 16 years ago during the global financial crisis.

Berlin said last week that it would begin to pare down its holding, a move that began on Tuesday with the sale of some 53 million shares, cutting its stake to 12%.

In the past, German officials had privately expressed reluctance to let a foreign buyer acquire Commerzbank amid fears it would create an even stronger domestic competitor for Deutsche Bank.

Deutsche Bank declined to comment on the transaction.

Also on Tuesday, Manfred Knof, the chief executive of Commerzbank, said he would not stand for another term when his contract concludes at the end of 2025.

During his tenure, Knof has played down prospects of a possible big bank merger, saying he was striving to keep the bank independent.

UniCredit, which is already present in Germany through HVB, has long held ambitions over Commerzbank.

Orcel, who took over as CEO of the Italian bank in 2021, studied a deal and approached Knof in early 2022, before the Ukraine conflict, people with knowledge of the matter have told Reuters.

Orcel's predecessor, Jean Pierre Mustier, had also been working on a Commerzbank acquisition but political opposition thwarted any deal, according to a person who had worked on the transaction.

The purchase of the German government's Commerzbank shares by a single buyer is a surprise. It had been expected to go to multiple institutional investors in smaller blocks.

($1 = 0.9054 euros)

(Reporting by Tom Sims, Christian Kraemer, and Giulia Segreti, Editing by Rachel More, Christina Fincher and Tomasz Janowski)