UniCredit’s Bid for Commerzbank Faces German Resistance

Milan-based UniCredit is pursuing a takeover of German lender Commerzbank, a move valued at approximately €35 billion (£30 billion), despite strong opposition from the German government and Commerzbank’s management. The Italian bank aims to increase its stake in Commerzbank beyond 30%, triggering a formal takeover bid, a strategy described by some as an “unfriendly attack.”

UniCredit’s Strategy and Offer

UniCredit currently holds a near-30% stake in Commerzbank, acquired after initially taking a 9% stake in September 2024. The bank is now offering a share swap that values Commerzbank at €30.8 per share, representing a 4% premium. CNBC reports that UniCredit CEO Andrea Orcel does not anticipate increasing the stake significantly above 30%, a key regulatory threshold under German takeover law.

Crossing the 30% threshold would allow UniCredit to purchase Commerzbank shares on the open market. But, Orcel has indicated that a full takeover scenario is “remote,” as acquiring 100% of Commerzbank would consume 200 basis points of UniCredit’s capital. Reuters highlights that this bid is designed to avoid a full takeover while still exerting pressure on Commerzbank to engage in merger talks.

German Opposition and Concerns

The German government, which bailed out Commerzbank during the 2008 financial crisis and still holds a more than 12% stake, is strongly opposed to the takeover. Officials have publicly stated their commitment to maintaining Commerzbank’s independence, particularly due to its crucial role in lending to Germany’s Mittelstand – small and medium-sized businesses. The Guardian notes that former Chancellor Olaf Scholz has labeled the Italian move an “unfriendly attack.”

Commerzbank’s management also opposes the offer, stating it does not deliver value for its shareholders and emphasizing its focus on “independence and profitable growth.” The Munich Eye reports that Commerzbank CEO Bettina Orlopp stated the offer was “not coordinated” with the bank and lacked a premium for shareholders.

Germany’s second-largest trade union, Verdi, has also voiced opposition, citing concerns about the impact on jobs at both HypoVereinsbank (UniCredit’s existing German bank) and Commerzbank.

Financial Implications and Next Steps

UniCredit expects to formally launch the offer in early May, pending shareholder approval. Analysts predict that UniCredit may initially acquire around 40% of Commerzbank’s shares, with full control potentially requiring a lengthy process and improved offers. The Munich Eye indicates the current offer represents a modest premium of only 4% above the recent average stock price.

Commerzbank’s share price rose to €31.30 on Monday in early trading following the announcement. UniCredit shares are down 10% year-to-date, while Commerzbank shares have fallen more than 18%.

Key Takeaways

• UniCredit is attempting to increase its stake in Commerzbank to over 30%, triggering a takeover bid.
• The German government and Commerzbank’s management are strongly resisting the takeover.
• The offer values Commerzbank at approximately €35 billion, with a 4% premium.
• A full takeover by UniCredit is considered unlikely due to capital requirements and regulatory hurdles.
• The outcome of this bid will significantly impact the German banking sector and its support for the Mittelstand.