Munich Re/HVB: Re think

Munich Re must be disappointed that Unicredito’s E15bn all-share offer for HVB did not contain any cash sweetener. The German reinsurer has been quite open about its desire to reduce its exposure to the struggling bank. It owns an 18% stake, worth E2.8bn. It now faces a dilemma over how to best to achieve this. In an ideal world, it would prefer a cash exit. But failing that, an HVB merger with Unicredito is not a bad alternative. That’s because the deal would dilute Munich Re’s concentrated exp...