Commerzbank lower after German government says no plan to sell any more shares

Investing.com — Shares of Commerzbank (ETR:) and UniCredit (OTC:) declined on Monday after the German government announced it would retain its 12% stake in Commerzbank for the time being, signaling that a potential merger with UniCredit is likely on hold, Reuters reported on Monday. 

Commerzbank and UniCredit were down 4.9% and 1.6% at 5:08 a.m. ET (0908 GMT).

Late Friday, Germany’s Finance Agency confirmed that the state will not sell additional shares in the bank, emphasizing its focus on remaining independent. 

This marked the clearest indication yet that Berlin does not support a takeover of Germany’s second-largest lender.

UniCredit’s move to acquire Commerzbank shares had surprised Berlin, drawing opposition from labor unions and raising concerns within Commerzbank that a merger could result in job cuts and reduced lending to small and medium-sized enterprises.

With over 25,000 business clients and involvement in nearly a third of Germany’s foreign trade payments, Commerzbank plays a crucial role in the German economy, employing more than 42,000 people, the report added. 

Given the government’s 12% ownership, it is expected to have a decisive influence on whether any future deal proceeds.

As per the report, the German government’s stance is a major factor in the potential merger discussions.