The Italian bank Unicredit’s recent stake in Commerzbank has prompted Germany to halt further sales of its shares in the bank. The government is now committed to maintaining the bank’s independence.
Frankfurt/Berlin – Following Unicredit’s unexpected entrance into Commerzbank, the German government has decided not to sell any additional shares in the bank for the time being. This decision was made by the responsible steering committee in Berlin, as announced by the Federal Financial Agency. The resolution also includes any potential share buybacks by Commerzbank.
Commerzbank AG is considered a stable and profit-generating institution, according to the announcement. “Its strategy is focused on independence.” The federal government will support this direction by maintaining its shareholding for the foreseeable future.
Since the financial crisis, the federal government has been the largest shareholder of Commerzbank. However, it began to sell shares gradually. The recent sales created an opportunity for Unicredit to make a surprising large-scale entry into the DAX-listed company. The Italians now hold nearly 9.2 percent of the shares, while the federal government retains 12 percent.
Unicredit outbid all competitors
The federal government sold 4.49 percent of its shares on September 10 through an accelerated book-building process. All interested parties were treated equally, as required by European state aid law, according to a statement from the Federal Ministry of Finance on Friday. Initially, it appeared that several buyers would acquire shares during the auction. However, it later became clear that Unicredit would take all available shares due to its markedly higher bid compared to competitors.
The allocation price was set at €13.20 per share, which was 60 cents higher than the shares’ closing price on September 10. The government made €702 million from the sale. Only after Unicredit’s acquisition was confirmed did it become known that the Italians had secured an additional 4.7 percent of Commerzbank shares on the stock market, partly through derivatives — hence, the regulatory threshold of 3 percent was not initially reached, keeping the stock purchase under wraps.
Union opposition against takeover attempt
Before the Federal Financial Agency’s announcement, the Verdi union and the works council of Commerzbank demanded government resistance against a takeover by Unicredit. The federal government must advocate for a strong, independent Commerzbank, stated a joint statement from employee representatives. “The government must not sell any more shares in Commerzbank and should clearly position itself for preserving Commerzbank as an independent institution, especially in the interest of the German economy,” demanded Verdi Chairman Frank Werneke.
Should a deal with Unicredit go through, two-thirds of the jobs could be at risk, warned Uwe Tschäge, the chairman of the Commerzbank works council, in an interview with Bloomberg. By the end of June, Commerzbank reported approximately 38,700 full-time positions worldwide, with more than 25,000 located in Germany.
Unicredit has become the second-largest shareholder of the bank through its stock purchase. The third-largest shareholder, with around seven percent, is US asset manager Blackrock, which holds the shares through various funds and therefore has no strategic interest. Unicredit is already represented in Germany through HVB. dpa
