It appears that Commerzbank is undergoing an Italian transformation.
Large Italian bank Unicredit makes a significant entry into Frankfurt's financial scene, causing talk of a potential acquisition of the local exchange. Employee advocates voice opposition.
The incorporation of Unicredit into Commerzbank sparks takeover rumors within the Frankfurt-based bank. The Italians seized the opportunity when the government declared share sales, subsequently purchasing an increased number of shares on the market, as announced by Unicredit in Milan. In total, the Italians now hold approximately 9% of Commerzbank's shares.
The government aims to phase out Commerzbank, which it salvaged from collapse with billions in taxpayer funds during the 2008 financial crisis. The bank refrained from revealing intentions to boost its stake further, opting for supervisor approval to boost it beyond 9.9%. Commerzbank's share price registered a surge of over 15%. According to ntv stock market correspondent Sabrina Marggraf, "analysts believe they would pair well."
Unicredit entered the German banking sector almost two decades ago. In 2005, it acquired the German Hypovereinsbank (HVB) for approximately 15 billion euros, since establishing a strong presence in Germany's retail banking market.
Speculations of an Italian takeover and merge of Commerzbank with their Hypovereinsbank subsidiary have surfaced over the years. With German headquarters and Italian corporate ones, the merged bank would be headquartered in Germany.
Italians hold four times the market weight
Unicredit acquired nearly half of its Commerzbank shares from the German government. The government sold nearly 4.5% to the Italians as part of the announced partial exit last week. The Italians were prepared to pay significantly more than the shares' market value on Tuesday evening. All shares offered by the government were assigned to Unicredit "due to a significant overbid of all other offers," as the responsible federal finance agency in Frankfurt reported.
The allocation price of 13.20 euros per share was 60 cents, or nearly 5%, over the Tuesday closing price. Discounts are usually included in large placements. The government raised slightly over 700 million euros from the sale of around 53 million shares. Thus, the state's stake decreased to 12%, retaining its largest shareholder title for the time being. However, Unicredit now holds the second-largest stake with 9%.
Unicredit and Commerzbank declined during the 2008/2009 financial and economic crisis and the EU debt crisis at the beginning of the last decade. Both banks' shares plummeted by over 90%. Since then, their situations have significantly improved, in part due to increased interest rates. Unicredit's revival has been more substantial.
With a market value of approximately 60 billion euros, Unicredit holds the financial power to acquire Commerzbank. Commerzbank's market value is around 15 billion euros, equating to only about a quarter of Unicredit's.
Resistance towards possibly acquiring the Frankfurt-based institution arises from employee representatives. Commerzbank supervisory board member Stefan Wittmann expresses concerns about potential job losses and decision shifts to Italy. Wittmann, representing the Verdi union in the supervisory board, asserts that everything will be done to prevent an acquisition.
The Italian acquisition of Commerzbank shares could potentially lead to a significant shift in the German economy, affecting both banks and employees. Given Unicredit's significant stake in Commerzbank, discussions about operational changes and potential job losses within the Frankfurt-based institution are unavoidable.
The increasing influence of Unicredit in the German banking sector, with its financial power and market value, has raised concerns about the potential impact on the national economy, as well as on Commerzbank's operations and employees.
