MILAN, April 23 (Reuters) - Italian bank UniCredit holds a stake of 8.72% in Generali, the chairman of the country's biggest insurer said on Thursday as he listed the holdings of investors at the
UniCredit has boosted its stake in Generali to 8.7% in surprise move
UniCredit’s Increased Stake in Generali and Strategic Implications
By Gianluca Semeraro and Valentina Za
Generali’s Shareholder Structure and Recent Developments
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).
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.
Background on UniCredit’s Investment in Generali
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 an investment and has since spoken of reducing its stake so the higher figure came as a surprise.
UniCredit reiterated in a statement on Thursday that the Generali stake was just "a financial investment".
"It comes at an attractive financial return," it added.
Statements from UniCredit Leadership
CEO Andrea Orcel told a financial conference last June that UniCredit would gradually reduce its Generali investment and exit it over time.
UniCredit’s Broader Strategic Moves
UniCredit currently has a lot on its plate with its pursuit of Commerzbank, Germany's second-largest lender.
Commerzbank Stake and Takeover Plans
On Thursday, a filing showed UniCredit had slightly increased its direct Commerzbank stake to 26.77%, or 32.6% when including derivatives, up from 29.3% previously.
UniCredit is set to launch on May 5 a takeover offer for Commerzbank to lift its direct stake in the rival above 30%, a threshold which requires approval by the European Central Bank.
Other Key Players and Market Reactions
Meanwhile, 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.
MPS CEO Luigi Lovaglio has said the Generali stake is a "nice to have" for the MPS-Mediobanca group.
UniCredit’s Net Exposure and Hedging Strategies
In October, Orcel told analysts the net stake in Generali had been reduced below 5%, and the net exposure was less than 2% when including hedging contracts. He said at the time the stake was neither strategic nor "tactically important".
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."
Use of Derivatives to Manage Exposure
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.
(Editing by Alvise Armellini and Keith Weir)
