The announcement came alongside stronger-than-expected second-quarter earnings, with Commerzbank reporting a 94% year-on-year jump in net profit to 898 million euro, comfortably beating analysts’ consensus forecast of 845 million euro. The performance was driven by stronger commission income, giving management added momentum as negotiations gathered pace.

Chief executive Bettina Orlopp said discussions had started “in the genuine interest of both UniCredit and Commerzbank,” adding that both lenders were focused on creating value for shareholders, customers and employees.

“We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees,” she told the analysts.

“I’m optimistic that, step by step, we can find common ground on governance and also on the business model,” she told analysts, signalling a markedly softer tone after months of resisting UniCredit’s advances.

The change in stance reflects the growing influence of UniCredit, which has built a 48% stake in Commerzbank as part of its 45 billion (USD 52 billion) euro takeover pursuit.

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Banco BPM’s retreat came after its main shareholder, France’s Credit Agricole, gave a downvote to the deal, stating it would not bring any significant value, given the fact that it was a tie-up between the two mid-sized banks.

Credit Agricole CEO Olivier Gavalda, whose venture is Banco BPM’s largest shareholder with a 29.3% stake, also stated that he wasn’t approached about any project involving MPS and Banco BPM and is not aware of “any concrete proposal.”

“At ⁠this stage, it is very difficult to see how a combination between MPS and Banco BPM can be value-accretive ⁠for Banco BPM shareholders,” Gavalda said, while stating that Credit Agricole, which has four seats ⁠on Banco BPM’s board, would assess any proposal based on its ⁠strategic merits, execution risks and ability to create long-term value. He even preferred to combine Agricole’s own Italian unit with Banco BPM.

Post Gavalda’s remarks, BPM’s board decided to halt any discussions with MPS over a potential merger given no definitive progress had been made since it sought merger talks.

MPS, reacting to the news, said it had taken note of the position of both BPM and Credit Agricole and agreed to end any preliminary consultations, which it saw as necessary before proper negotiations.

“We would continue to assess all strategic options in the best interest of its shareholders, employees, and clients,” it said further.

The development also comes as a setback for the Italian government, which rescued MPS in 2017, as it promoted a merger with BPM that would combine the two mid-sized banks and create a third large player alongside Intesa and UniCredit.

The government’s efforts, however, prompted UniCredit to step in with a bid for BPM in late 2024, which ‌subsequently failed. UniCredit was the ⁠largest bank in Italy until Intesa in 2020 completed a hostile acquisition of a second-tier bank.

While UniCredit CEO Andrea Orcel has remained focused on a takeover of Germany’s Commerzbank, taking advantage of the situation, Intesa, in June 2026, put forward an unsolicited 35 billion euro merger offer for MPS.

Intesa, which holds a one-fifth market share in Italian banking, had steered clear of a first round of banking consolidation in Italy. That wave in 2025 culminated in Monte dei Paschi buying merchant bank Mediobanca and becoming the main investor in the sector’s ⁠most prized asset: insurer Generali.

MPS has said Intesa’s offer was insufficient, without formally rejecting it. As per the reports, the Tuscany-based bank would pursue an alternative to Intesa’s proposed deal only if it created more value for shareholders, with the 3 billion euro cash component in Intesa’s bid setting a benchmark.

Intesa’s cash-and-share offer for MPS that would create the euro zone’s second-largest listed lender by market value, saw the largest Italian bank offering 1.6 of its own shares plus 1 euro in cash for each MPS share tendered at a 12.5% premium to the latter’s shares’ closing price on the last trading day before the bid announcement.

“The premium appears lower than the average level ‌of premia ⁠observed in comparable voluntary public tender and/or exchange offers in the Italian banking sector, equal to approximately 30%,” MPS said on July 16.

“The MPS board also expressed doubts about annual pre-tax synergies of 2.9 billion euro Intesa projected as part ⁠of its bid, composed of both cost savings and revenue enhancement. They ‘appear high relative to the economic scale’ of the MPS assets in the deal,” it said.

To address competition concerns, Intesa has agreed to sell to insurer Unipol, a ⁠banking business comprising around 635 MPS branches, roughly half the network, and the lender’s central offices in Siena.

Unipol, the largest investor in BPER Banca, will then merge those assets with BPER to create a bank ⁠operating under the Banca Monte dei Paschi name.

However, MPS still sees significant uncertainty remaining over antitrust reviews, including possible remedies regulators could require and assessments linked to Intesa’s acquisition of the Generali stake through the MPS deal.

However, Intesa has refused to give in to MPS’ demands, with its CEO Carlo Messina stating, “There is zero possibility that we will increase our price for Monte dei Paschi.”

Messina further hit back at his merger target by stating that MPS traded at about 15 times earnings, compared with about 11 times for Intesa and UniCredit.

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The announcement, made to staff on the bank’s intranet and seen by the media outlet Reuters, marks a significant turn in the months-long battle ⁠over control of Germany’s second-largest lender.

While Orlopp and her management team have been opposed to a tie-up, they have conducted several – yet unsuccessful – talks with UniCredit in the past months.

“In the weeks and months ahead, Commerzbank and UniCredit will engage in discussions to determine, step by step, how to move forward,” Orlopp told employees in the internal post, while stating the goal of the talks will be to strengthen the bank’s systemic relevance to Germany.

“The German federal government, employee representatives, and our supervisory board have ⁠all made clear that they now expect UniCredit to engage with Commerzbank constructively. And I think UniCredit is ready for that, too. Because without dialogue, there can be no value creation,” she said further.

Orcel also expressed the willingness to negotiate with the German government and Commerzbank employees. However, the approach, as per the analysts, would be a problematic one, as it looks to sidestep the German lender’s management.

It is worth mentioning that the German Finance Ministry oversees a 12% stake in the Commerzbank, which has been held by the government since the venture’s bailout during the global financial crisis.

UniCredit invested in Commerzbank in ⁠September 2024, launching a nearly two-year tug-of-war that pitted Italy’s and Germany’s number two banks against each other. UniCredit has since built a 48% stake in its rival.

Orlopp’s statement comes after the message of the bank’s chairman, Jens Weidmann, who said that the Italian bank’s dominance of its shareholder base ⁠meant “constructive talks” were needed to establish a framework in the interests of shareholders and staff.

While stating that Commerzbank would have preferred a different outcome from the whole saga, Weidmann implied that he had no other choice but to enter the talks ‌with ⁠the Orcel-led venture.

“We have to have constructive talks to establish the key parameters for staff, shareholders and the customers of the bank. Everyone needs to act like adults now, because one thing is certain: ⁠These discussions are in UniCredit’s interest as well, and there will be no ⁠shortcut via Berlin,” Weidmann ⁠said.

Weidmann’s response came within the 24 hours of UniCredit’s remark, in which it asked its German counterpart to start adopting the strategy the Italian bank ‌has mapped out in January 2026.

Orcel, from his part, raised the pitch further by stating that his business had the option of using its 48% stake to install a new board.

The whole takeover saga, which has also seen severe opposition from the German government, has been the grim reminder about ⁠the difficulty of merging large banks across Eurozone countries, despite policymakers wanting more tie-ups to compete with bigger American rivals.

The post Commerzbank to resume talks with UniCredit for pan-European deal, says CEO appeared first on International Finance.

The bank’s chairman, Jens Weidmann, said that the Italian bank’s dominance of its shareholder base ⁠meant “constructive talks” were needed to establish a framework in the interests of shareholders and staff.

While stating that Commerzbank would have preferred a different outcome from the whole saga, Weidmann signaled that he had no other choice but to enter the talks ‌with ⁠the Andrea Orcel-led venture..

“We have to have constructive talks to establish the key parameters for staff, shareholders and the customers of the bank. Everyone needs to act like adults now, because one thing is certain: ⁠These discussions are in UniCredit’s interest as well, and there will be no ⁠shortcut via Berlin,” Weidmann ⁠said.

Weidmann’s response came within the 24 hours of the UniCredit’s remark, in which it asked its German counterpart to start adopting the strategy the Italian bank ‌has mapped out in January 2026. Orcel raised the pitch further, by stating that his business had the option of using its 48% stake to install a new board.

Boosted by better than expected earnings and an upgraded its profit outlook, Orcel has taken an assertive path now, by asking for talks with the Berlin government, a Commerzbank shaPrareholder, and the German lender’s worker representatives.

However, both the stakeholders have asked the UniCredit boss to engage with his Commerzbank counterpart Bettina Orlopp.

“We are in a position to call an extraordinary general meeting and exercise … control. We would do that if that’s necessary, but our expectations are (not to have) to do that at ⁠the moment, if we have everybody on board and on the same direction … from January 1,” Orcel told analysts.

Orcel, a veteran dealmaker, has tactically used derivatives, to complete the takeover of Commerzbank.

“We got to control (of Commerzbank) potentially without making any concession, as you usually would in a transaction. So now we are quite open,” he told CNBC television.

UniCredit first invested in Commerzbank in 2024, prompting Germany to reject the Milanese lender’s approach as hostile and back Commerzbank’s quest to remain independent. The European country’s finance ministry has still maintained its aggressive stance against the Itaian lender, apart from calling the latter to engage in a constructive approach. Sascha Uebel, head of the Commerzbank’s works council, criticised UniCredit for turning to worker representatives.

“Can we all please act like adults now? Under corporate law, management decides what happens ‌in a ⁠company,” he said.

Germany still owns 12% of Commerzbank after a 2009 bailout, a stake UniCredit needs to buy to eventually merge Commerzbank with its own German business HVB in two or three years’ time.

UniCredit also sees economic gains from Commerzbank adopting its strategy. On July 23, it raised the estimated benefits by 50% to 1.2 billion euro (USD 1.4 billion) before taxes.

Orlopp has said that terms for any takeover negotiations should reflect the importance of ⁠Germany for the combined group and respect the Frankfurt-based lender’s business model.

Declining costs and strong net fees drove UniCredit’s second-quarter profit to 2.9 billion euro. UniCredit now expects 2026 income comfortably above 11 billion euro, compared with previous guidance for a result in line or above that figure. Orcel sees the tally rising to significantly more than 13 billion euro in 2028, excluding the full consolidation of Commerzbank.

By cancelling a ⁠planned 4.75 billion euro share buyback, UniCredit will keep its core capital at 13% of assets in 2026 despite the hit it will take, by consolidating Commerzbank into its accounts. The buyback cancellation, however, has weighed on the bank’s shares, which fell 3.6%.

The post Commerzbank lowers resistance, signals openness to UniCredit takeover talks appeared first on International Finance.

While the latest development puts UniCredit a step closer to gaining decisive control of Commerzbank, which it has been trying to buy ‌since 2024, Orcel, the chief architect of the cross-border deal, now faces the choice of whether he wants to lift the stake above 50%, which would allow his bank to propose board changes at Commerzbank, or attempt to first build consensus, as the banking industry veteran had pledged to do.

UniCredit, which has been present in Germany since 2005 through its Bavarian unit HVB, could still struggle to advance its takeover project, as the latter is facing a united opposition from the Friedrich Merz government, unions, and Commerzbank itself.

Commerzbank, in its latest reaction, has said that less than 2% of institutional and retail ⁠investors had tendered their shares as part of UniCredit’s offer, reiterating its same stance again.

“The low acceptance ‌rate ⁠among independent shareholders is clear evidence of ⁠the low attractiveness of the ⁠offer,” Commerzbank said.

Germany’s Finance Ministry, on the other hand, renewed its criticism of UniCredit, calling the Italian lender’s “aggressive and hostile approach” unacceptable.

The Merz government still holds 12% of Commerzbank following a 2009 bailout. While expressing its displeasure over UniCredit’s share tendering practices, Commerzbank has remained open to constructive dialogue with ⁠its Italian counterpart.

Orcel and his Commerzbank counterpart Bettina Orlopp have held several rounds of short-lived informal talks, but attempts to hold substantive negotiations over the takeover bid have so far failed to produce fruitful results due to disagreements.

UniCredit, facing unsurmountable pressure in Germany, now expects the European Central Bank (ECB) to declare it to be in control of Commerzbank under German rules.

It would, however, need majority ownership in order to name all shareholder representatives, while overhauling Commerzbank’s supervisory board, as Orcel has suggested it may seek to do.

As per Hans-Peter Burghof, chair of banking and financial services at the University of Hohenheim, workers’ representatives hold half the seats on the board, and they “dislike” UniCredit’s approach.

Orlopp, Stepping into the situation, reportedly put forward a video message ⁠to employees on the bank’s intranet, where she urged for calm.

“With the results of the takeover offer, we are now facing a situation that is new for all of us. But we will not let it unsettle us,” Orlopp said according to a transcript of the message seen by media outlet Reuters.

What could potentially make Commerzbank’s acquisition a difficult affair for UniCredit is the bailout contract that, as per Burghof, also reserves two seats for the government on the German lender’s board.

Angering Commerzbank further, Orcel has laid out to investors his plans to boost the German lender’s profits, which, once in control, ‌he would ⁠reportedly implement over a couple of years while keeping Commerzbank separate from HVB.

Having built a 26.7% stake in the rival lender since September 2024, UniCredit stepped up its efforts in May 2026 by launching a tender offer, in which, instead of seeking control, the Italian lender wanted to nudge its stake above 30%, which would free it to buy more shares on the market without triggering a mandatory buyout.

UniCredit told the Commerzbank, “Take-up of the offer totalled 17.6%. That is up from 12.5% before a two-week extension of the tender period dictated by German takeover laws.”

Since then, the two entities have been involved in an ugly spat over the ⁠take-up data. As per Commerzbank, shares had been tendered mostly by investment banks that were counterparties in swap contracts UniCredit had entered on Commerzbank shares.

Excluding treasury shares, which carry no voting rights, UniCredit has a 49.7% voting stake in Commerzbank, well above the threshold of around 40%, which generally entails a position of control under Germany’s corporate rules. However, going by the same rules, being declared in control without majority ownership ⁠would force UniCredit to consolidate a minority stake.

UniCredit also has the choice of opting to amend swap contracts it owns, which currently can only be settled in cash and not shares, handing it a further 11.5% of Commerzbank.

As per Commerzbank management, a combination of the banks could result in 11,000 job cuts, while the works council has ⁠projected 23,000 cuts. The German lender, which has around 38,000 full-time positions, has undertaken several rounds of major cuts over the past ⁠decade, including 3,000 jobs earlier in 2026 and a 2021 deal with the unions, in which 10,000 jobs got axed.

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The letter, signed by CEO Bettina Orlopp and being mailed to shareholders, said UniCredit’s offer isn’t high enough and that the Italian bank had ⁠not presented a “sound plan” that builds on the German bank’s ⁠strengths.

While maintaining that ⁠it published the figures to increase transparency, Commerzbank also said that institutional investors have tendered just somewhat more than 1% of shares in UniCredit’s takeover offer.

The two banks have been in a bitter battle for control for ‌months, ⁠and UniCredit’s all-stock acquisition offer is currently ongoing.

“The shareholder structure ⁠remains largely unchanged. Of the 12.51% of tendered shares, ⁠institutional investors have tendered 1.29% of shares, retail ⁠investors 0.05%, and banks 11.17%,” Commerzbank said, while pressing up the attack on UniCredit.

UniCredit’s CEO Andrea Orcel, on the other hand, said that he and the Italian lender’s top leadership are expecting the European Central Bank (ECB) to declare the financial venture in control of Commerzbank, given how much it owned after its takeover offer.

“At the moment, it is a lot more probable that we end up with what the ECB would call control than not,” Orcel told the recently concluded annual Mediobanca CEO conference in Milan.

“Due to minority holding rules, merging its accounts with those of Commerzbank without majority ownership would cost ⁠UniCredit 40% more in terms of core capital. We never launched this offer to go to control. Now we are in a situation where we might,” Orcel added further.

As per UniCredit, it launched a voluntary exchange offer for Commerzbank shares on May 5; it simply wanted to nudge its 27% stake above the 30% mandatory takeover threshold, apart from being able to freely buy more on the market in 2027. The offer, which carried a very modest premium, concluded on June 16 with a 12.5% take-up, handing UniCredit 42.5% control of Germany’s Commerzbank.

“At this level, UniCredit will be able to determine the outcome of shareholder resolutions, prompting the ECB, which is reviewing the matter, to declare it in control of Commerzbank,” Orcel noted.

The CEO is also keen to preserve UniCredit’s capital reserves to keep up its payout policy and for consolidation in Italy.

The offer has been vehemently opposed by the Commerzbank and German government due to accusations and concerns over acceptance data and UniCredit’s use of derivatives. As per Commerzbank, the shares have been tendered by banks, not institutional investors, and in most cases, banks that were UniCredit’s swap counterparties.

Orcel, countering the allegations, said excluding passive investors (as they cannot sell their stakes), all institutional Commerzbank investors except five have either tendered or sold their shares.

“We confirm that institutional and retail investors have only contributed around 1% of the tendered shares, reflecting that the offer does not represent the value of Commerzbank as seen, amongst others, by independent market research,” he added.

Commerzbank hit back by reiterating its view that ⁠the take-up was not proof that the market liked the bid.

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While the Friedrich Merz administration cited factors like a low price and concerns about the Italian bank’s “aggressive approach,” behind its rejection of the UniCredit’s proposal, Orcel, on June 18, ended up criticizing Germany’s banking ⁠sector.

“Germany is the market in Europe where customers are the least satisfied. ‌Some ⁠27% of Germans don’t like the services that banks give. It is the market with the highest penetration of fintechs ⁠and where American banks are gaining the most market ⁠share from the top down,” Orcel said during a business conference ⁠in Rome.

UniCredit, on June 15, accused Commerzbank of “misleading the public” over the merger talks. Hitting back at this, Orlopp said on the same day, “We have, of course, simply presented the facts, and ‌we ⁠will continue to do so, because we are the ⁠only ones who actually have access to ⁠them.”

The main bone of contention here has been the fact that UniCredit’s all-share offer comes with a discount that allegedly undervalues the German bank’s shares. As per Commerzbank, none of UniCredit’s institutional investors have tendered their shares. While reaching out to BaFin, Germany’s Federal Financial Supervisory Authority, with the request of investigating UniCredit’s take-up data, Commerzbank stated that the shares came from banks which, in most cases, are counterparties of UniCredit, which reportedly holds derivatives with Nomura, Citi, and BNP Paribas.

“Suggestions that the actual number of tendered shares is lower because these shares have been borrowed from UniCredit are false and without foundation. We have been compelled to clarify our position to set ‌the ⁠record straight because of the continued and relentless dissemination of inaccurate and misleading information, which was interfering with the offer process,” the Italian bank said in a statement, while attacking Commerzbank.

After saying ⁠its goal was to lift its stake just above 30%, UniCredit has so far secured around 40% of Commerzbank, enough to give the Italian venture control of shareholder resolutions at meetings. Despite that, UniCredit skipped Commerzbank’s last annual general meeting, stating that ⁠should it secure sufficient support at a future AGM, it would be in a position to appoint all shareholder representatives on the supervisory board.

“This would have responsibility for appointing the management board,” UniCredit said, adding that the move would have allowed it to ⁠implement a profit-boosting strategy it had previously promised for Commerzbank.

As of June 15, UniCredit’s take-up stood at 11.91% of Commerzbank’s capital, giving the Italian venture an overall holding of 41.9%, including a 26.77% equity stake it had previously built and another 3.22% in share-settled derivatives. UniCredit also holds 13.19% of Commerzbank in cash-settled derivatives.

With both banks digging in their heels in the months-long battle for control of one of Germany’s most important lenders, BaFin’s entry onto the battlefield has now made things complicated. Post-2008 global financial crisis, the German government started holding stakes in Commerzbank. While the ratio stands at 12% currently, the federal administration has been a vocal critique of UniCredit’s tie-up attempts.

“Accepting the offer was already not an option from a financial point of view, as it does not include an appropriate premium on the current share price of Commerzbank’s shares,” BaFin said.

Despite Berlin’s opposition, UniCredit could still win control of the German bank. However, the Merz administration’s 12% stake gives it seats on Commerzbank’s supervisory board, which appoints management and helps oversee its strategy.

BaFin, which also manages the government’s holdings, further supported Commerzbank’s independence, noting that the bank played a critical role in financing medium-sized Mittelstand companies and was an integral player in Frankfurt, the European nation’s financial ‌hub.

Frankfurt prosecutors, on the other hand, have reportedly begun a preliminary investigation into possible market manipulation related to UniCredit’s offer. In response, UniCredit said that it was aware of the matter and that the prosecutors’ response was “in line with protocol when such complaints are filed.”

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Investors have already tendered Commerzbank shares representing 7.6% of the Frankfurt-based bank’s capital as of June 2, according to the weekly data published by UniCredit under German takeover rules.

The new takeover bid, which runs until June 16, has also been placed at a discount to market prices, keeping in mind the behaviour of institutional investors, who typically wait with their ​decision until the last few days of the tender period.

As per UniCredit, its voluntary exchange offer was intended to push the Italian lender’s 27% Commerzbank stake above ​the mandatory takeover threshold of 30%, allowing the Andrea Orcel-led venture to buy more Commerzbank shares ​on the market later.

Apart from holding 34.4% in direct stake, UniCredit also has derivatives on 16.4% of Commerzbank’s share capital. However, most of these can only be settled in cash, which, as per the bank, has given it the option of lowering its final stake if needed. Taking together some share-settled derivatives, UniCredit’s Commerzbank ​holding stands at 37.6%.

The previous deal pitched by UniCredit to Commerzbank got rejected in May 2026, with the latter digging in its heels despite UniCredit steadily emerging as the German venture’s largest shareholder.

Since September 2024, UniCredit and its CEO Andrea Orcel have been in constant news for their repeated attempts, including unsolicited offers, to buy Commerzbank shares in a deal that values the bank at nearly 39 billion euros (USD 45.37 billion), below its market price. Even the current bid, that values Commerzbank at 35.75 euro a share, remained below June 1’s closing price of 37 euro.

Commerzbank’s supervisory and management boards, in May 2026, recommended the shareholders not to accept UniCredit’s offer.

“The offer does not reflect the fundamental value of Commerzbank. It is vague, entailing considerable risks,” the German venture used these words. UniCredit’s repeated attempts have become a source of discomfort in Germany’s political and business circles, with Commerzbank executives, along with Germany’s government and bank employees, finding a common ground in criticizing the tie-up attempt.

“UniCredit’s takeover offer does not offer an adequate premium to our shareholders. What is described as a combination is in fact a restructuring proposal that would massively impact our proven and profitable business model,” said Commerzbank CEO Bettina ‌Orlopp in April.

UniCredit, in May, hit back at its German counterpart, calling many of the latter’s statements “unfounded or unsupported.” As per CEO Andrea Orcel, a veteran banker himself, Commerzbank has not been living up to its potential, and Europe would benefit ⁠from bigger banks in a world of chaotic geopolitics.

Commerzbank’s other concern has been up to 11,000 full-time job cuts that would come with the takeover by UniCredit. It also warned that investors who accepted the offer exposed themselves to UniCredit business risks in Russia and its large Italian government bond holdings.

Among Commerzbank’s investors, Andreas Thomae of Deka Investment called UniCredit’s offer “unattractive” and warned that its plans could bog Commerzbank down for years “with the risk of losing its customer focus.”

“The voluntary ⁠exchange offer is currently not an option,” he remarked during Commerzbank’s annual shareholder meeting in May.

The post UniCredit increases Commerzbank stake to 34%, launches new takeover bid appeared first on International Finance.

UniCredit, currently Commerzbank’s largest shareholder, earlier May 2026, made an unsolicited offer to buy the German venture’s shares in a deal that values the bank at nearly 39 billion euros (USD 45.37 billion), below its market price.

“Commerzbank’s supervisory and management boards recommend that shareholders not accept UniCredit’s exchange offer,” ⁠the bank said in a summary of a 137-page analysis of the deal.

It further stated that the offer “does not reflect the fundamental value of Commerzbank” and that it was “vague and entails considerable risks”.

Commerzbank executives, along with Germany’s government and bank employees, have long criticised the tie-up attempt as hostile, calling UniCredit’s offer “vague and coercive” with “quasi-nil premium”.

“UniCredit’s takeover offer does not offer an adequate premium to our shareholders. What is described as a combination is in fact a restructuring proposal that would massively impact our proven and profitable business model,” said Commerzbank CEO Bettina ‌Orlopp.

The ⁠battle for control of one of Germany’s top banks started in 2024 when UniCredit began amassing its stake in a competitor. Over the last two years, the tally has grown close to 30%. All the eyes will be upon Commerzbank’s annual shareholder meeting, that will be convened on May 20.

Responding to Commerzbank’s rejection, UniCredit said it ⁠fundamentally disagreed with many of its German counterpart’s statements, calling them “unfounded or unsupported”, and that it would respond with more detail “in due course”.

As per UniCredit CEO Andrea Orcel, Commerzbank has not been living up to its potential and that Europe would benefit ⁠from bigger banks in “a world of chaotic geopolitics.”

As per Commerzbank’s analysis, a takeover by UniCredit could result ⁠in up to 11,000 full-time job cuts. Investors accepting the offer may end up exposing themselves to UniCredit’s business risks in Russia, along with its large Italian government bond holdings.

The post UniCredit vs Commerzbank: German lender rejects fresh takeover bid appeared first on International Finance.

“We are astonished that ‌it took UniCredit more than 18 months to present a unilateral plan that lacks basic understanding of the drivers of our business model, despite regular investor meetings during this period,” Orlopp remarked, in response to the news of the Italian lender “laying out” a strategy to improve the target’s performance independently of any deal.

After building a near 30% stake in Commerzbank since September 2024, despite strong German resistance, both at industry and political levels, the Italian bank in March 2026 unveiled a 35 billion-euro (USD 41 billion) all-share offer for its acquisition target.

In an unscheduled analyst call, UniCredit outlined both its suggestions for Commerzbank and the possible outcomes of its takeover offer. However, both the second-largest German lender and Friedrich Merz, the European nation’s Chancellor, rejected UniCredit’s approach as hostile.

“Yes, we need large banks in Europe, but let me make one thing very clear in light of recent events: this does not mean that every form and type of takeover is welcome in Germany,” Merz said.

Commerzbank, which UniCredit described as a sector laggard that risked “becoming increasingly unfit” for the challenges facing the industry, said the Italian counterpart’s proposals reflected a lack of understanding about the German venture’s business model.

UniCredit has been pitching for Commerzbank to undertake cost cuts in its international network and “rampant bureaucracy” in its domestic business, suggesting the move would add 600 million euros to the 2028 profit consensus forecast at the German bank.

UniCredit also said the low premium of its bid would ensure the Commerzbank stake does not rise much above 30%.

“One scenario is we expect low take-up (from Commerzbank shareholders), we’re happy. Financially, we win. We sit back. UniCredit would not seek to gain control of Commerzbank for a further 12-18 months, so it could resume capital distribution ‌plans and rebuild its cash reserves. We go back to the status quo,” UniCredit CEO Andrea Orcel said.

“Under German corporate rules, UniCredit could be declared in control of Commerzbank with a stake as low as 40% because that can be enough to drive decisions at shareholder meetings. That would put returns that UniCredit investors reap on the investment in Commerzbank below the cost of their capital – a red line for Orcel, a veteran dealmaker,” reported Reuters.

If UniCredit gets Commerzbank’s control, then the Italian lender may have to buy out minority shareholders in Commerzbank’s Polish unit, mBank, in cash.

According to Orcel, discussions were ongoing with Polish authorities on the topic.

“We have levers to keep … (out of) a situation where we have excessive capital consumption and a cascade offer in cash that are penalising. The current Commerzbank stake is ⁠giving UniCredit shareholders a 20% return on investment. The return would be much lower on a stake of 50% plus one share,” he said.

“But we will execute an industrial and strategic move… at the end of the day, this is why we’re here,” The UniCredit CEO added.

The post Commerzbank rejects UniCredit’s fresh takeover offer, calls it hostile appeared first on International Finance.