Italy's UniCredit announced on Wednesday that it had acquired a 9% stake in German lender Commerzbank and will "explore value creating opportunities for all stakeholders in both banks."
The purchase makes UniCredit one of Commerzbank's largest shareholders and follows speculation in recent years that the Italian lender could be interested in taking over the German bank.
Almost half of the shareholding was bought through an accelerated book building launched by the German government, while the remaining shares were bought on the market, UniCredit said in a statement.
Commerzbank didn't immediately respond to a request for comment.
The German state has long held a 16.5% Commerzbank stake through its bank rescue fund as a result of a bailout 16 years ago during the global financial crisis.
Berlin said last week that it would begin to pare down its holding, a move that began on Tuesday with the sale of some 53 million shares.
In the past, German officials had privately expressed reluctance to allow Commerzbank to be acquired by a foreign buyer amid fears it would create an even stronger domestic competitor for Deutsche Bank.
Also on Tuesday, Manfred Knof, the chief executive of Commerzbank, said he would not stand for another term when his contract concludes at the end of 2025.
During his tenure, Knof has played down prospects of a possible big bank merger, saying he was striving to keep the bank independent.
UniCredit, which is already present in Germany through HVB, reportedly discussed merging with Commerzbank before Russia invaded Ukraine in 2022.
The purchase of the German government's Commerzbank shares by a single buyer is a surprise. It had been expected to go to multiple institutional investors in smaller blocks.
UniCredit paid 13.20 euros ($14.58) per share, above the daily closing price of 12.60 euros, Germany's finance agency said.
Shares in Commerzbank rose 4.4% in premarket trade.
