UniCredit’s Commerzbank bid faces resistance from management and Berlin, as Orcel pushes to cross the 30% threshold and force takeover.
UniCredit’s new takeover offer for CommerzBank, launched mid-March, is encountering opposition from both the Frankfurt-based lender and the German government, which owns 12.7% of the bank.
UniCredit currently holds a 26% direct stake in Commerzbank and an additional 4% through financial derivatives. It aims to cross the 30% mandatory takeover threshold, triggering a compulsory bid that would allow the Milan-based bank to freely increase its holding in the open market.
The offer is structured as a swap of 0.485 UniCredit shares for each Commerzbank share; at an implied price of €30.80, the proposal values the German lender at roughly €35 billion ($40.5 billion). CommerzBank CEO Bettina Orlopp rejected the offer, which incorporates a slim 4% premium, describing it as “unacceptable” and not aligned with the bank’s standalone approach.
UniCredit CEO Andrea Orcel, known for his aggressive expansion strategy, said he will improve terms only in the presence of a “common plan” benefiting all stakeholders. He added that he could offer a more favorable exchange ratio and a higher cash component.
A major pan-European banking group with a significant presence in 13 core markets, UniCredit is Italy’s second-largest lender, with €870 billion in total assets. Commerzbank is one of Germany’s leading commercial banks, with assets totaling €590 billion and clients across over 40 countries worldwide.
A potential tie-up between the two lenders would create one of the largest credit institutions in Europe and a major financial powerhouse on an international level. Some observers harbor doubts, however. “UniCredit seems to see value in putting forward hostile exchange offers, even if they’re doomed to fail,” comments Paola Biraschi, head of Southern European Banks at FitchSolutions’ CreditSights unit.
“It happened with Banco BPM [last year], and it’s set to happen again with CommerzBank. From an economic standpoint, the formalization of an offer for 100% of CommerzBank enables [UniCredit] to increase its stake above 30% without breaching any regulatory limitations. But there are also strategic implications, and a reputational cost that could eventually be associated with the strategy failure. Time will tell whether such a hostile approach can deliver results.”
