UniCredit reaches deal to boost Commerzbank stake

By Steve Goldstein

Government in Berlin increasingly seeking to ward off Italian acquisition of Germany's No. 2 bank

UniCredit on Monday said it's reached an agreement to further increase its stake in Commerzbank as the government in Berlin increasingly attempts to ward off an Italian acquisition of Germany's No. 2 bank.

UniCredit said it's entered into a financial instrument to buy another 11.5% of Commerzbank on top of the 9% it acquired during a government auction.

It said settlement won't occur for the new stake until it receives permission to boost its holding to 29.9%. UniCredit didn't disclose whom the agreement was with.

Commerzbank shares (XE:CBK) moved off lows following the UniCredit (IT:UCG) announcement. The stock is up 19% this month.

"The majority of UniCredit's economic exposure has been hedged to provide it with full flexibility and optionality to either retain its shareholding, sell its participation with a floored downside, or increase the stake further. This will depend on the outcome of engagement with Commerzbank, its management and supervisory boards as well as its wider stakeholders in Germany," said UniCredit.

The German government late on Friday said that it won't sell any more shares in Commerzbank and that the bank's strategy is geared toward independence.

-Steve Goldstein

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09-23-24 0711ET

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