According to Bloomberg news reports on Thursday (Sept. 21), UniCredit reportedly held talks with German government officials about a possible acquisition of Commerzbank AG following its restructuring. Reports noted that a short-term acquisition is unlikely, as both FIs are selling assets and cutting jobs as they look to become profitable again, but unnamed sources also said they are in the early stages of negotiating an all-share acquisition.
The deal would combine Commerzbank, Germany’s second-largest lender, into UniCredit, Italy’s largest. The combined entity would have more than $1.6 trillion in assets, according to reports, and would increase UniCredit’s access to small- and medium-sized businesses (SMBs).
Last year, Commerzbank launched a peer-to-peer small business lending platform that operates like an alternative financial services player, providing a matchmaking service to link SMB borrowers and institutional investors. Months prior, the bank also said it joined SWIFT’s global payments innovation initiative, an effort that focuses on innovation in the cross-border payments space using the SWIFT payments messaging network with a focus on faster payments and data collection.
The German government holds a 15 percent stake in Commerzbank and, according to reports, would have to agree to any deal.
“A purchase could boost UniCredit’s bottom line, even if it paid a premium of about 35 percent,” said Keefe Bruyette & Woods Analyst Hugo Cruz in a note sent to clients. But because both banks are in the midst of their own restructuring initiatives, any deal is likely to take place in the more distant future.
Last year, Commerzbank in London and UniCredit said they had successfully processed the first U.K. Bank Payment Obligation live transaction in a combined effort to boost BPO activity across Europe, according to Commerzbank.