Commerzbank AG (DE:CBK) shares rallied yesterday after its Italian counterpart UniCredit S.p.A (IT:UCG) acquired a 9% stake in the German lender. This includes a 4.5% stake bought from the open market and the remaining 4.5% purchased from the German government. Despite lowering its stake, the German government remains the largest shareholder in Commerzbank, with UniCredit now in second place. CBK stock gained 16.5% in yesterday’s trading session, while UniCredit shares remained flat.
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Headquartered in Germany, Commerzbank offers a broad spectrum of banking services to individual and corporate clients. Meanwhile, UniCredit is an Italian banking conglomerate that provides financial services across Europe.
UniCredit CEO Signals Merger Talks with Commerzbank
After acquiring a 9% stake, UniCredit is reportedly considering a merger with Commerzbank. According to Reuters, UniCredit CEO Andrea Orcel has initiated discussions with Commerzbank about a potential merger.
However, the acquisition of Commerzbank could trigger political opposition in Germany, as well as resistance from within the German bank. Nonetheless, the acquisition of a 9% stake by UniCredit may signal the beginning of the much-anticipated banking consolidation in Europe.
Meanwhile, UniCredit announced plans to discuss value-creating opportunities with Commerzbank and may seek approval to increase its stake beyond 9.9% in the future. The Italian bank further stated that any decision to raise its shareholding will depend on whether the investment meets UniCredit’s strict financial criterion.
What Is the Commerzbank Share Price Target?
Following the news, J.P. Morgan analyst Kian Abouhossein upgraded his rating for Commerzbank stock from Hold to Buy. He predicts 17.13% upside potential in the share price. In addition, DZ Bank confirmed its Buy rating and RBC Capital maintained a Hold rating on CBK stock.
Overall, CBK stock has received a Moderate Buy rating on TipRanks, backed by seven Buy and five Hold recommendations. The Commerzbank share price forecast is €17.25, which implies 17.5% upside potential from the current trading level.
