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European Regulators Signal Backing Commerzbank Deal
October 15, 2024
A potential takeover of Commerzbank by UniCredit will likely receive regulatory approval, according to senior officials from various central banks, including the European Central Bank (ECB). Almost all of them view cross-border consolidations favorably and as a means to enhance bank profitability in Europe, despite some concerns about increased risks from larger banks. One official noted that UniCredit is a well-run bank, while a few cautioned that the creation of bigger banks can lead to bigger risks. Last month, UniCredit announced that it had increased its stake in Commerzbank to around 21% and had submitted a request to boost that holding to about 29.9%. However, the German government which holds a 12% stake in Commerzbank, opposes the takeover but recognizes its limited ability to intervene. Criticism has been directed at UniCredit’s approach to acquiring shares in Commerzbank, with officials expressing concern about its impact on the German economy.
Commerzbank’s bonds traded stable with its EUR 4.25% Perp at 93.8, yielding 6.6%.
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