MILAN, Sept 12 (Askume) – Shares in Commerzbank (CBKG.DE) and UniCredit (CRDI.MI) rose on Thursday after the Italian bank’s Chief Executive Officer Andrea Orcel said he would buy more shares in its German rival and planned to acquire it, fuelling speculation of further deals in the sector.
Commerzbank shares were up 2.6% by 0845 GMT. Orser told Bloomberg TV he would acquire the remaining 12% of state-owned Commerzbank and would also be interested in merging with it if conditions were right. UniCredit also rose 2%.
“We expect more news on European bank mergers and acquisitions in the future, which could have negative consequences for historically targeted banks,” JPMorgan analyst Kian Abouhausen said in a note to clients on Thursday.
“Historically, M&A in the banking sector has been driven by the pace of announced deals.”
Analysts expect the deal to boost UniCredit’s profits, shift its German operations from regional to national and focus on the country’s small and medium-sized businesses.
However, Auxerre’s approach could bring potential political hurdles and risks.
“We believe any M&A talks are likely to fail due to price, lack of government support, potential execution risks and in particular cost savings,” JPMorgan analysts said in a note.
“Furthermore, we believe Italian M&A will not be ruled out and could still be a potential option for commercial bank acquisitions depending on share price trends,” he added.
Orser said in an interview on Thursday that his bank could increase or decrease its stake in Commercial Bank or try to merge the two.
The Euro Stoxx 600 Bank Index (.SX7P) rose 1.5% in early trade .
