UniCredit Doubles Stake in Greek Bank Alpha in Latest M&A Twist

UniCredit doubles stake in Greek bank Alpha in latest M&A twist

By Valentina Za

MILAN (Reuters) -UniCredit has done a deal to double its stake to close to 20% in Greece's Alpha Bank, the Italian bank said on Wednesday, as it diverted its attention away from M&A stumbling blocks elsewhere.

Last week UniCredit challenged in court government conditions hampering a bid for domestic peer Banco BPM, while its ambitions to tie up with Germany's Commerzbank are also on hold due to government hostility.

UniCredit said it has used derivatives bought through leading investment banks to buy 9.7% of Alpha at a discount to the latest closing price. It already owned 9.6% of Alpha.

"This step strengthens our successful partnership with Alpha", CEO Andrea Orcel said in a statement.

The bank will now seek ECB approval for the deal which would allow it to cross the 10% threshold and reach a potential holding of up to 29.9%.

UniCredit also used derivatives to acquire 28% of Commerzbank. It bought a stake in Assicurazioni Generali too, but Orcel on Tuesday ruled out a takeover offer for Italy's biggest insurer.

It first invested in Alpha in late 2023, becoming its main shareholder by buying the 9% stake held by Greece's state-controlled bank bailout fund HFSF for 293.5 million euros ($332 million).

The investment was part of a deal that saw UniCredit acquire most of Alpha's Romanian business and strike a commercial partnership to sell its own asset management products to the 3.5 million clients of Greece's fourth-largest bank.

The increased holding will allow the bank to book the investment in a way that generates an additional net profit of around 180 million euros per year, UniCredit said, adding it would return that money to shareholders.

The impact on UniCredit's core capital will be of around 40 basis points it said.

($1 = 0.8835 euros)

(Reporting by Valentina Za, editing by Alvise Armellini and Elaine Hardcastle)