UniCredit acquires a significant stake of 4.5% in Commerzbank
16 years post-financial crisis entrance, the state is gradually letting go of Commerzbank, starting with a sale to an Italian titan in banking.
Unicredit, an Italian banking giant, is the acquirer as stated by the Federal Financial Supervisory Authority. They bought the entire 4.49% stake in the first placement of Commerzbank shares for 13.20 euros per share, amounting to a grand total of 702 million euros. On Tuesday, Commerzbank shares closed at 12.60 euros.
As a result of this sale, the state's ownership in Commerzbank falls from approximately 16.5% to 12%. The German government provided the institution with capital aid worth 18.2 billion euros to aid its survival during the 2008-2009 financial crisis. This sale involves the disposal of more than 53 million shares, thereby reducing the government's share to 12%.
Last week, the Federal Financial Supervisory Authority announced its plans to sell off its stake in Commerzbank in stages. Eve Grunwald, the CEO of the authority, stated that "with this initial partial sale of the stake, the successful stabilization of the bank and the government's exit are initiated."
At the current market price, the remaining state stake in the bank is valued at around 2.5 billion euros. The shares cost around five billion euros during the time of acquisition. To make a profit, a share price of about 26 euros would be required - Commerzbank shares were trading at around 13 euros recently. Unlike Lufthansa's rescue during the corona pandemic, where the state made more than 700 million euros from the sale of its stake, the taxpayer may incur losses in the case of Commerzbank.
The funds gained from the sale of Commerzbank shares will go into the Financial Market Stabilization Fund, which was utilized to help other institutions during the financial crisis as well. According to the Federal Financial Supervisory Authority, this fund had a deficit of approximately 21.6 billion euros at the end of 2023.
Following the sale, Commerzbank's state ownership decreases to 12%, having been reduced by more than 53 million shares. The Italian bank giant, Unicredit, was the buyer in this transaction, acquiring a 4.49% stake for 702 million euros.
