UniCredit raises stake in Commerzbank to 28% as Orcel ups ante on pursuit

Core Viewpoint - UniCredit has increased its stake in Commerzbank to 28% through derivatives, signaling potential interest in a buyout of the German bank [1][2]. Stake Details - The current ownership structure of UniCredit includes a 9.5% direct stake and approximately 18.5% through derivative instruments, up from a previous 21% holding [2]. Strategic Intent - UniCredit believes there is substantial value in Commerzbank that needs to be realized, emphasizing the importance of a strong banking sector for Germany's economic development [3]. - The bank's position remains an investment at this time and does not affect its €10 billion ($10.49 billion) offer for Banco BPM [3]. Regulatory Aspects - UniCredit has applied to the European Central Bank for permission to acquire up to 29.9% of Commerzbank [2]. Government Stance - The German government has opposed UniCredit's interest in Commerzbank, holding a 12% stake after reducing its position in September [5]. - The political landscape in Germany is currently unstable, with upcoming elections following a no-confidence vote against Chancellor Olaf Scholz [5]. Potential Synergies - A merger with Commerzbank could create synergies in capital markets, advisory services, payments, and trade finance activities [6]. Market Reaction - Following the news, UniCredit shares rose by 1.1%, while Commerzbank stock increased by 3.1% [7].