UniCredit raises stake in Germany’s Commerzbank to 21%

UniCredit has announced it has increased its stake in German lender Commerzbank, in a move likely to inflame tensions with Berlin.

The Italian bank said it was raising its stake from around 9% to 21%, but that the deal was subject to regulatory approval.

It also announced that it had submitted a request to the European Central Bank to boost its holding to up to 29.9%.

“UniCredit believes that there is substantial value that can be unlocked within Commerzbank, either stand-alone or within UniCredit, for the benefit of Germany and the bank’s wider stakeholders,” said the Italian lender in a statement.

“However, as was the case for UniCredit, such potential requires action for it to be crystalized,” it added.

If the lender’s 21% stake is approved, UniCredit will become Commerzbank’s largest shareholder, despite opposition from Berlin.

The German government, which currently owns 12% of Commerzbank, said last week that it would halt a planned disposal of its stake.

Politicians are angered by UniCredit’s handling of its Commerzbank ownership, accusing the lender of being secretive about its holdings.

The Italian bank acquired a 4.5% stake in Commerzbank earlier this month, which it bought from the German government.

According to the FT, the state was only told at the last minute that Commerzbank already had a 4.5% share – bringing its total stake to 9%.

UniCredit had accumulated the initial portion through derivatives, a method that did not require full disclosure.

Andrea Orcel, CEO of the Italian bank, has nonetheless stated publicly that Berlin was informed of UniCredit’s existing stake before the second 4.5% acquisition.

Unions are notably opposed to a UniCredit takeover due to concerns that a merger could lead to job cuts and hinder lending to small and medium-sized businesses.

Commerzbank will hold meetings this week between its management and supervisory boards, with UniCredit set to dominate the agenda.