UniCredit Present at Generali Shareholder Meeting With 8.7% Stake

UniCredit has increased its Generali stake to 8.7% in surprise move 

UniCredit’s Growing Stake in Generali and Its Implications

By Gianluca Semeraro

Generali Stake Announcement at AGM

MILAN, April 23 (Reuters) - Italian bank UniCredit holds a stake of 8.72% in Generali, the insurer's Chairman Andrea Sironi said on Thursday as he listed the holdings of investors at its annual general meeting (AGM).

Background: Generali’s Strategic Importance

The future of Generali, Italy's biggest insurer, has become a focus of interest in a consolidation wave sweeping Italian finance and rival factions have long tussled over its governance.

Previous UniCredit Position and Market Expectations

UniCredit had built a stake of 6.7% ahead of last year's Generali AGM, where it sided with a rebel investor. It said at the time it was a financial investment and has since spoken of reducing its stake so the higher figure came as a surprise.

UniCredit Chief Executive Andrea Orcel repeatedly said last year the bank would cut its exposure to Generali.

Changing Dynamics Among Major Investors

In the meantime, Generali's biggest investor, merchant bank Mediobanca, has been taken over by Monte dei Paschi di Siena and the repercussions for the insurer are not yet clear.

Statements from MPS and UniCredit Executives

MPS CEO Luigi Lovaglio has said the Generali stake is a "nice to have" for the MPS-Mediobanca group.

Orcel told a financial conference last June that UniCredit would gradually reduce its Generali investment and exit it over time. UniCredit currently has a lot on its plate with its pursuit of Commerzbank, Germany's second-largest lender. 

Recent Developments and Future Outlook

In October, Orcel told analysts the net stake in Generali had been reduced below 5%, and the net exposure was less than 2% when also including hedging contracts UniCredit had taken out. He said at the time the stake was neither strategic nor "tactically important".

Financial Strategies and Derivatives

A person with knowledge of the matter said Orcel was referring to UniCredit reducing its net financial exposure, a goal that can be achieved by acquiring protection against a potential drop in the Generali share price through derivatives.

Parliamentary Commentary and Current Position

In November, addressing a parliamentary committee in Rome, Orcel reiterated the net stake had been cut to around 2% and UniCredit was holding on to it and "observing the situation."

(Additional reporting by Valentina Za; Editing by Alvise Armellini and Keith Weir)