Germany to Keep Commerzbank Shares After UniCredit Takes Stake — Update

By Adam Whittaker and Adria Calatayud

Germany's government decided to keep its stake in Commerzbank until further notice, after a sale of a portion of its shares to Italy's UniCredit sparked speculation about a potential takeover.

The German government--the biggest shareholder in Commerzbank--said Friday that it won't offload any additional shares in the bank following the sale to UniCredit for 702 million euros ($783.5 million) completed last week, which reduced its ownership to 12% from 16.49%.

The move marks an U-turn for the government, which had said earlier this month that it wanted to start process to exit the stake in Commerzbank it built during the financial crisis of 2008.

UniCredit bought the Commerzbank shares the German government put up for sale as well as further stock on the market, taking a 9% stake in its smaller German peer and becoming its second-biggest shareholder after the government.

Disclosure of the stake purchase revived speculation among investors and analysts that UniCredit could pursue a deeper tie-up of the two banks, and sent Commerzbank shares sharply higher.

A full merger between UniCredit and Commerzbank isn't a certainty, but it is an option, UniCredit Chief Executive Andrea Orcel told Bloomberg TV last week.

Following a committee meeting, Germany's Financial Market Stabilization Fund decided won't sell any additional shares following the partial sale of Commerzbank shares on Sept. 10 and 11, the country's finance agency said. This also includes sales related to any share buybacks by Commerzbank, the agency said.

Write to Adam Whittaker at adam.whittaker@wsj.com and to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

September 20, 2024 13:10 ET (17:10 GMT)

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