Commerzbank shares fall 6% as German government plans to keep stake

FRANKFURT, Sept 23 (Reuters) – Shares of Commerzbank (CBKG.DE), opens new tab and UniCredit (CRDI.MI), opens new tab opened lower on Monday after the German government said that it would retain its 12% stake in the German bank for now in a move that will likely keep any merger with the Italian lender on hold.

Late on Friday, Germany’s Finance Agency said the state will not sell any more shares in Commerzbank for the time being and the bank’s strategy is “geared towards independence”, in the clearest sign yet that the government does not favour a takeover of the country’s second-biggest lender.

Commerzbank shares were down 5.6% in Frankfurt, while UniCredit stock was 1.5% lower in Milan. Commerzbank’s shares had gained around 24% since Sept. 11, the day that UniCredit announced it had amassed a 9% stake in the German bank and expressed an interest in a merger. UniCredit shares had gained 5%.

The announcement by the finance agency, an arm of the German finance ministry, means that UniCredit was now unlikely to make a takeover offer soon, some analysts said.

UniCredit’s unexpected acquisition of Commerzbank shares took Berlin by surprise and triggered opposition from labour unions and prompted a defence strategy from Commerzbank over fears that a merger could lead to massive job losses and stifle lending to small and medium-sized businesses.

Commerzbank, with more than 25,000 business customers, almost a third of German foreign trade payments and more than 42,000 staff, is a linchpin of the German economy.

The German government, which still owns 12% of Commerzbank after selling 4.5% of its shares to UniCredit, would play a key role in whether any deal can take place.

Check out the performance of top stocks on our dedicated FX Trust Score page.

News sourced from [Reuters] – Reporting by Tom Sims and Paolo Laudani, Editing by Rachel More and Louise Heavens.