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UniCredit already controls about 28% of Commerzbank’s voting rights as the Italian bank steps up its acquisition of the German lender as it pursues domestic rival Banco BPM.
The Italian bank said on Wednesday it had entered into a new financial instrument linked to Commerzbank shares after quickly taking a 21% stake in the bank in September.
UniCredit directly holds a 9.5% stake in Commerzbank, but is subject to rules that prohibit it from increasing its stake above 9.9% without the consent of European regulators.
UniCredit also said on Wednesday it had “initiated” a formal approval process, meaning the Italian bank will decide within 90 days whether to increase its direct stake above 10%.
A person familiar with the matter told the Financial Times that a decision would be made “in mid-March”, which could set the stage for the derivatives to be held by Andrea Orcel, the Italian bank’s chief executive. Paving the way for the conversion of commodities into stocks.
As a bank with a healthy balance sheet and regulated by the European Union, approval should be a formality, people familiar with the matter said.
A UniCredit spokesman said “the clock has begun to tick” but declined to comment further. The European Central Bank and German financial regulator BaFin declined to comment.
Italy’s UniCredit launched a euro plan in Germany last month, but the bank’s latest stake increase underscores Orser’s continued pursuit of German business despite facing strong resistance from the country’s establishment and increasingly complex conditions in the country’s domestic market. The bank’s ambitions and the possibility of a deal that would create a European banking champion.
UniCredit said its latest move for Commerzbank had “no impact” on its takeover bid for BPM, which has rejected a takeover bid from its larger rival. The bank said the move was in line with its previously stated goal of increasing its stake in the German bank to 29.9%.
The Italian bank added that its increased exposure to Commerzbank while hedging “reinforces” its view that “there is significant value within Commerzbank that needs to be crystallized”.
The strengthening of Germany’s political opposition is seen as weakening Commerzbank’s chances of striking any deal ahead of key elections early next year.
German Finance Minister Jörg Kukies said in November that he expected Orcel to abandon the approach due to Germany’s “very critical stance”, even though UniCredit already operates in Germany through its HypoVereinsbank unit business.
Commerzbank said it had “taken note” of UniCredit’s statement but would not comment further.
The proposed deal for Italy’s UniCredit also faces domestic political opposition.
BPM on Tuesday urged Italy’s financial watchdog Consob to investigate UniCredit Bank’s takeover bid, saying it failed to comply with certain rules, people familiar with the matter said.
BPM claimed that UniCredit’s offer did not correctly reflect its value and was intended solely to prevent it from acquiring asset manager Anima.
Under Italy’s so-called passive rules, targets are prohibited from taking actions for six months that could affect the outcome of an immediate takeover bid.
As a result, BPM cannot amend the terms of its tender offer for Anima to the detriment of its shareholders, people familiar with the matter said.
