UniCredit lifts stake in Commerzbank to 21%

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UniCredit has increased its stake in Germany’s Commerzbank from about 9 per cent to 21 per cent, in a move that could kick-start a hostile bid for the rival lender.

The Italian bank said on Monday it had taken a position in a further 11.5 per cent of Commerzbank’s shares, but that the deal would not complete until “the required approvals have been obtained”.

UniCredit said that “there is substantial value that can be unlocked within Commerzbank, either standalone or within UniCredit, for the benefit of Germany and the bank’s wider stakeholders”.

A merger between the two groups would be the first significant cross-border bank deal in Europe since the financial crisis and a potential catalyst for further consolidation across the continent’s fragmented sector.

UniCredit surprised the German establishment two weeks ago by unveiling a 9 per cent stake in Commerzbank, a lender it has long courted as a takeover target.

UniCredit needs approval by the European Central Bank to lift its stake above 9.9 per cent.

UniCredit’s chief executive Andrea Orcel has set his sights on acquiring European rivals, with the potential to turn the Italian lender into a vehicle for consolidating the sector.

The Italian bank bought a 4.5 per cent stake from the German government earlier this month, but it had already accumulated a 4.5 per cent position through derivatives.

The move has caused uproar in Germany, with politicians and labour unions opposing a full takeover.

Executives at Commerzbank have warned the German government that a tie-up with UniCredit could hobble lending to small and medium-sized Mittelstand companies, while unions have raised the prospect of job cuts.

This is a developing story