Investing.com — UniCredit SpA (BIT:CRDI) said on Wednesday that it had increased its potential stake in Germany’s Commerzbank (ETR:CBKG) to 28% through new derivative agreements, up from 21% previously.
The Italian bank has sought approval from the European Central Bank to raise its stake further, up to 29.9%. UniCredit stated that it is engaging with regulators as the authorization process continues. Currently, it directly owns 9.5% of Commerzbank and holds an additional 18.5% via derivatives.
“UniCredit’s average entry price for the entire position is below current trading levels,” the bank noted, suggesting the investment could be sold at a profit.
“UniCredit’s economic exposure is almost fully hedged, displaying prudence in approach and providing full flexibility and optionality,” it added.
This move comes as UniCredit has also initiated a takeover bid for its smaller domestic competitor, Banco Bpm SpA (BIT:BAMI).
Unicredit emphasized that its holding in Commerzbank is “solely an investment” for now and does not affect its ongoing offer for Banco BPM.
In a press release, Commerzbank said it had “taken note of the announcement,” but refrained from further comment. The German bank’s shares rose more than 2% in European trading Wednesday.
UniCredit announced in November a proposal to acquire Banco BPM in a deal valued at approximately 10 billion euros ($10.5 billion).
If finalized, the transaction would unite two of Italy’s largest banks. UniCredit stated that it is offering 6.657 euros per share in an all-stock deal.
The lender said that the acquisition would enable it to “further strengthen its role as a leading pan-European banking group.”
Prior to Unicredit’s bid, Banco BPM made an offer to buy asset manager Anima in a potential deal worth 1.6 billion euros. Shortly after, the bank purchased a 5% stake in the state-owned lender Banca Monte dei Paschi di Siena SpA (BIT:BMPS) (MPS).