Unicredit attack on Commerzbank: takeover offer moves closer

Berlin. A takeover bid for Commerzbank by its Italian competitor Unicredit is becoming increasingly likely. The Milan-based major bank has increased its direct stake in Germany's second-largest private bank to approximately 26 percent by converting warrants, the bank announced on Monday morning.

At the same time, the Italian attackers announced that they also intend to convert their remaining financial instruments into Commerzbank shares "in due course." After this step, they would control 29 percent of the share capital. If they exceed the 30 percent mark, Unicredit would be obligated to submit an official purchase offer to the remaining shareholders of the DAX-listed group.

"UniCredit is consolidating its position as Commerzbank's largest single shareholder," the statement read. While the bank does not currently intend to seek representation on the Board of Management, it will continue to closely monitor Commerzbank's progress in strengthening its business and creating value for shareholders, customers, and employees.

Unicredit CEO Andrea Orcell once again demonstrates that he is not particularly impressed by the resistance from Commerzbank management and the German government. He also seems to want to refute the unwritten rule of the financial industry that a bank takeover of this magnitude is unlikely to be realized against the resistance of the government at its headquarters.

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Commerzbank and the German government appeared unimpressed. "The increased equity allocation does not change the fundamental situation or our stance," the Frankfurt-based bank stated. "Commerzbank is excellently positioned and well on its way to establishing itself as a major player among Europe's leading banks."

The responsible Federal Ministry of Finance also provided a very brief comment on the news. The federal government "takes note" of the increased stake, a spokeswoman said. However, its position on a potential takeover remains unchanged. UniCredit rejects "once again uncoordinated and unfriendly actions." The government supports Commerzbank's strategy of independence. This has been made very clear to UniCredit. "The federal government will therefore not sell its stake," she emphasized.

Internally, however, there is considerable anger over Unicredit CEO Orcell. The banker has repeatedly spoken kindly but acted unkindly, according to government officials. He can no longer be trusted.

Opposition is also coming from parliament. "I view a takeover of Commerzbank by UniCredit with skepticism," said Sebastian Roloff, economic policy spokesman for the SPD parliamentary group, to the RedaktionsNetzwerk Deutschland (RND). "In these economically challenging times, German SMEs need a strong and independent Commerzbank," the MP said. Furthermore, the past has shown that takeovers often lead to job cuts. "I therefore hope, for the sake of the employees and companies in this country, that the takeover does not go ahead," the Social Democrat emphasized.

Commerzbank's defensive battle against the takeover attempt, which has repeatedly been described as "hostile," has been ongoing since September of last year, when then-Finance Minister Christian Lindner (FDP) decided to sell the Commerzbank shares held by the German government. A 16 percent federal stake remained from the bank bailout during the financial crisis. The Finance Ministry put a package of just under 4.5 percent up for sale in an initial tranche. The German government was surprised by Unicredit's interest at the time and reluctantly agreed to a sale to the Milan-based company, as they had made by far the best offer.

Subsequently, the government halted the sale process and made it clear, both in direct talks with Unicredit and publicly, that Germany rejected a takeover of its second-largest bank. Nevertheless, in the following weeks, Unicredit gradually increased its stake through financial instruments, which led to a public outburst from then-Chancellor Olaf Scholz (SPD) on the sidelines of a summit visit in New York.

The current Chancellor, Friedrich Merz (CDU), has also emphasized that he is critical of a takeover and is committed to a “strong and independent Commerzbank.”

The bank, led by CEO Bettina Orlopp, aims to preserve its independence by cutting thousands of jobs and increasing profits. After a record profit of almost €2.7 billion in 2024, net income is expected to grow to €4.2 billion by 2028. Management aims to increase return on equity from 9.2 percent in 2024 to 15 percent in 2028. Shareholders are also expected to be kept happy with increasing dividends.

A takeover of Commerzbank would be the largest deal in the industry with German participation in years. In late summer 2008, in the midst of the financial crisis, Commerzbank bought the struggling Dresdner Bank—and it took years to get over it.

With material from dpa