Monday saw a lower opening price for Commerzbank and UniCredit shares. This followed the German government’s announcement that it will retain its 12% interest in the German bank for now. This action is expected to delay any potential merger with the Italian lender.
Germany’s Finance Agency indicated that the government does not support a takeover of the nation’s second-biggest lender. The agency stated that the state will not sell any further shares in Commerzbank for now, and the bank’s strategy is “geared towards independence.”
In Frankfurt, Commerzbank’s stock fell 5.6%, while in Milan, UniCredit’s stock dropped 1.5%.
Since Sept. 11, when UniCredit revealed it had acquired a 9% stake in the German bank and indicated interest in a merger, Commerzbank’s shares increased by about 24%. Meanwhile, shares of UniCredit rose by 5%.
As a result of the announcement made by the German finance ministry’s finance agency, some analysts predicted that UniCredit would not likely launch a takeover offer anytime soon.
Berlin was caught off guard by UniCredit’s abrupt takeover of Commerzbank shares. This led to resistance from labor unions and Commerzbank, prompting the development of a defense plan over concerns about job losses and restricted lending to small and medium-sized enterprises.
With more than 42,000 employees, over a third of German international trade payments, and more than 25,000 commercial clients, Commerzbank is a vital component of the German economy.
Whether a deal can be reached will be heavily influenced by the German government. It still controls 12% of Commerzbank despite selling 4.5% of its shares to UniCredit.
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