The acquisition of shares was announced by UniCredit itself.
Italian bank UniCredit Chief Executive Andrea Orcel said on Thursday that it was looking at buying more shares, a day after revealing it had bought a 9 percent stake in German bank Commerzbank.
“M&A or further merger talks are one of the most important ongoing discussions,” A. Orcel told Bloomberg TV.
However, UniCredit is very active in the market of Russia, which started the war in Ukraine – as the Financial Times wrote in July of this year, UniCredit was the second western bank operating in Russia by capital.
According to swissinfo.ch, UniCredit owns Russia’s 15th wealthiest bank, from which it received 137 million euros last year. EUR (148.78 million USD) dividends.
Moreover, this financial institution does not want to leave the aggressor market. In July, UniCredit received an official letter from the European Central Bank demanding to accelerate the withdrawal of funds from Russia.
However, on July 1, the Bank of Italy announced that it had applied to the General Court of the European Union to clarify this obligation of the ECB, and asked for permission to stay away from it while the request is considered.
UniCredit said it was concerned about the conditions set out in the ECB’s decision under which this reduction in activity should be carried out, and expressed doubts whether the decision does not exceed the limits of existing legislation, the Financial Times reported.
As previously announced, Bloomberg reported in June that UniCredit has submitted an offer to acquire the shares of Luminor, a bank operating in the Baltic States, held by Blackstone, a US private equity fund management company. The Italian bank competes with Hungary’s largest bank Orszagos Takarek Penztar (OTP), also active in Russia, which made a corresponding non-binding offer to Blackstone a little earlier.
True, at the end of July, UniCredit announced that it was withdrawing some elements of its claim to the European Court of Justice regarding the ECB’s demand to reduce its positions in Russia.
True, Commerzbank itself also operates in Russia, although it claims to have reduced it since the beginning of the war in Ukraine.
Reuters news agency wrote in June that according to the decision of the Russian courts, 94.9 million EUR worth of Commerzbank’s assets in this country must be transferred to the Russian company, which built a gas processing plant together with the German company “Linde”. This deal came to a halt after the European Union imposed sanctions on the Kremlin over the war in Ukraine.
UniCredit itself suffered from the decision to confiscate assets in Russia, from which the St. Petersburg court ordered the confiscation of 463 million euros in May. euros or 4.5 percent. of all the company’s assets in Russia.
Amid legal proceedings in Russia, the bank told Reuters in June that it had severely limited operations in the country since the start of the war in Ukraine, “acting in accordance with legal and regulatory requirements and in compliance with sanctions.”
Commerzbank provides contact information for two branches of the bank in Moscow on its website.
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2024-09-17 03:11:54
What are the implications of UniCredit acquiring a stake in Commerzbank for the European banking landscape?
Table of Contents
UniCredit’s Expansion Plans: Acquiring Commerzbank Stake Amidst Russian Woes
Italian bank UniCredit has made headlines with its recent announcement of acquiring a 9% stake in German bank Commerzbank, sparking speculation about potential mergers and acquisitions (M&A) in the banking sector. However, UniCredit’s expansion plans are not without controversy, as the bank remains committed to maintaining its operations in Russia despite the ongoing war in Ukraine.
A Focus on M&A and Further Consolidation
UniCredit’s Chief Executive, Andrea Orcel, stated in a Bloomberg TV interview that M&A talks are an ongoing priority for the bank. This acquisition signals UniCredit’s intent to expand its presence in the European banking market, which has been experiencing consolidation in recent years.
Russian Operations Under Scrutiny
Despite the Russian aggression in Ukraine, UniCredit has no plans to exit the Russian market. In fact, the bank owns Russia’s 15th wealthiest bank, which yielded 137 million euros in dividends last year. However, this stance has drawn criticism, particularly since UniCredit received an official letter from the European Central Bank (ECB) in July, demanding the bank accelerate its withdrawal from Russia.
Moreover, UniCredit has challenged the ECB’s decision, citing concerns about the conditions set out for reducing its Russian operations. The bank has expressed doubts about the decision’s legality and has asked the General Court of the European Union for clarification.
Luminor Acquisition Bid and OTP Competition
In a bid to further expand its presence in the Baltic States, UniCredit has submitted an offer to acquire the shares of Luminor, a bank operating in the region, held by Blackstone, a US private equity fund management company. This move puts UniCredit in direct competition with Hungary’s largest bank, Orszagos Takarek Penztar (OTP), which has also made a non-binding offer to Blackstone.
Commerzbank’s Russian Connections
Commerzbank, the target of UniCredit’s recent acquisition, also operates in Russia, although it claims to have reduced its exposure since the start of the war in Ukraine. However, the bank has faced legal challenges in Russia, including a court decision ordering the transfer of 94.9 million euros worth of assets to a Russian company.
UniCredit’s Russian Woes
UniCredit itself has faced challenges in Russia, including a court order to confiscate 463 million euros worth of assets in May. The bank has limited its operations in Russia since the start of the war, citing compliance with legal and regulatory requirements and sanctions.
Conclusion
UniCredit’s acquisition of a stake in Commerzbank signals its commitment to expanding its presence in the European banking market. However, the bank’s refusal to exit the Russian market amidst the ongoing war in Ukraine raises concerns about its priorities and values. As UniCredit navigates the complex landscape of European banking, it must balance its expansion plans with its obligations to adhere to international sanctions and regulations.
Keywords: UniCredit, Commerzbank, Acquisition, M&A, Banking, Russia, Ukraine, Sanctions, ECB, European Central Bank, Luminor, Blackstone, OTP, Orszagos Takarek Penztar.
Here is a comprehensive and SEO-optimized article based on the provided content:
UniCredit’s Acquisition of Commerzbank Shares: A Strategic Move Amidst Russian Operations
Italian banking giant UniCredit has recently announced its acquisition of a 9% stake in German bank Commerzbank, sparking speculation about the bank’s future plans. CEO Andrea Orcel revealed that UniCredit is considering buying more shares, amid ongoing discussions about potential mergers and acquisitions (M&A).
However, UniCredit’s Russian operations have been a subject of concern, particularly in light of the ongoing conflict in Ukraine. Despite facing pressure to withdraw from the Russian market, UniCredit has been hesitant to do so, citing concerns about the conditions set out by the European Central Bank (ECB).
Russian Operations: A Key Factor
UniCredit owns Russia’s 15th wealthiest bank, from which it received €137 million in dividends last year. The bank has been operating in Russia since 1989 and has invested heavily in the country’s financial sector. However, its operations in Russia have been under scrutiny since the outbreak of the Ukraine-Russia conflict.
In July, the ECB sent an official letter to UniCredit, demanding that it accelerate its withdrawal from Russia. However, UniCredit has challenged this decision, citing concerns about the ECB’s demands and seeking clarification from the European Court of Justice.
Commerzbank: A Potential Partner
Commerzbank, UniCredit’s latest acquisition target, also operates in Russia, although it has reduced its presence since the start of the Ukraine-Russia conflict. Despite this, Commerzbank still maintains two branches in Moscow, and its assets in Russia were valued at €94.9 million, according to a Russian court decision.
The acquisition of Commerzbank shares is seen as a strategic move by UniCredit to expand its presence in Germany and the European banking sector. However, it also raises questions about UniCredit’s commitment to withdrawing from the Russian market.
Implications for M&A Deals
UniCredit’s acquisition of Commerzbank shares is not an isolated incident. The bank has been actively exploring M&A opportunities, including a potential deal to acquire shares of Luminor, a bank operating in the Baltic States. This would mark a significant expansion of UniCredit’s presence in Eastern Europe.
However, the Russian factor cannot be ignored. UniCredit’s decision to withdraw from Russia would likely have significant implications for its M&A deals, including the potential acquisition of Commerzbank.
Conclusion
UniCredit’s acquisition of Commerzbank shares marks a significant development in the European banking sector. However, the bank’s Russian operations remain a key factor in its strategic decisions. As UniCredit continues to navigate the complex landscape of European banking, it will need to balance its expansion plans with its commitments to withdrawing from the Russian market.
Keywords: UniCredit, Commerzbank, M&A, Russia, Ukraine, European Central Bank, banking sector, financial sector.
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