UniCredit and Commerzbank: The Challenge of the European Megaban

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UniCredit SPA (Ticker AT: CRDI.IT) has taken a significant step by acquiring a 9% stake in Commerzbank AG (CBK.GE), sparking speculation about a possible merger between the two European giants. This move marks a milestone in UniCredit's ambition to consolidate its presence in the European banking market. Commerzbank’s shares have risen by more than 18% since the news, reflecting market optimism about a potential consolidation.
Key Obstacles to the Merger:
1. Resistance from the German Government: The German state, which holds a 12% stake in Commerzbank, might insist on maintaining a national listing and a supervisory board in Germany due to the bank's strategic importance to the German economy.
2. German Unions: Unions in Germany may strongly oppose the merger, concerned about potential layoffs and the shift of power from Frankfurt to Milan.
3. Deutsche Bank's Interest: There is a possibility that Deutsche Bank, Germany's largest bank, could revive its interest in Commerzbank, further complicating the situation.
4. Shareholder Concerns: UniCredit's shareholders, who have seen a 230% increase in their earnings over the past three years, may fear that a merger could impact profitability, even though UniCredit has promised to maintain a 15% return on investment.
Despite these challenges, UniCredit CEO Andrea Orcel is determined to push forward with his ambitious consolidation plans, which could significantly transform the banking sector in Europe.

Technical Analysis:
Looking at the chart, Commerzbank AG experienced a slowdown in its rise at the end of May, reaching €15,825. After some attempts to recover at the end of July, the stock showed an upward gap, potentially signaling another attempt to reach its historical highs. Meanwhile, UniCredit had a relatively consistent rise until July, reaching €39,330, when its price fell, but it is in the process of recovering towards its highs with current support at €35,615.

Ion Jauregui - ActivTrades Analyst




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