trending Market Intelligence /marketintelligence/en/news-insights/trending/vMzfVhGldbZk32VDZLH-Tg2 content esgSubNav
In This List

Commerzbank shares unmoved by chatter about potential UBS interest

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Commerzbank shares unmoved by chatter about potential UBS interest

Investors appeared unmoved by the latest acquisition rumor swirling around Commerzbank AG, following a report that Swiss banking group UBS Group AG was potentially interested in acquiring parts of Germany's second-largest private lender.

Swiss newspaper Neue Zürcher Zeitung reported Nov. 26, citing "an insider," that a strategy team at UBS is working "at full speed" on various acquisition scenarios for Commerzbank. However, a complete takeover of the German banking group is considered unlikely, according to the source, because Commerzbank's less lucrative domestic business is not considered attractive for investors and will negatively affect UBS' own share price.

Neue Zürcher Zeitung's report, which was picked up by German media Nov. 27, pushed Commerzbank's price to an intraday high of €12.27 per share, but then it quickly fell, closing at €12.13, almost unchanged from the opening price of €12.11. By 4 p.m. Central European Time on Nov. 28, the share price had edged down by nearly 0.6% to €12.08, having opened at €12.18. Since the somewhat higher opening, the stock has been trading slightly down throughout the day.

Commerzbank has been the subject of takeover chatter since late July, when U.S. private equity fund Cerberus Capital Management LP acquired a 5.01% stake in the bank to join BlackRock Inc., which also holds around 5%, as its largest shareholders behind the German government.

Less than two months after that, in September, European peers UniCredit SpA and BNP Paribas SA reportedly targeted Commerzbank. In early October, France's Crédit Agricole SA was also said to be interested in a potential acquisition. Two weeks later, on Oct. 24, the Financial Times reported that Commerzbank has hired investment banks Goldman Sachs and Rothschild as advisers on a potential merger or acquisition attempt by another lender.

Unlike the other potential suitors, UBS has a direct connection with Commerzbank, having hired two people who know the German group very well, most notably former CEO Martin Blessing who left Commerzbank in April 2016 to head up UBS' Swiss operation. Axel Weber, current chairman of UBS, was the one to approve state aid for Commerzbank back in 2008 when he was acting president of the German central bank.

The German government is in no hurry to sell the 15.6% stake it still holds in Commerzbank, the German Finance Ministry announced in September, when rumors around interest in the lender intensified.

Spokespeople for both Commerzbank and UBS declined to comment on the latest reports in the Swiss and German media.