Outrage in Germany after UniCredit's 'hostile' takeover bid
Italian bank UniCredit said on Monday it has submitted an official takeover bid for German lender Commerzbank, a step that was swiftly met with condemnation in Frankfurt and Berlin, reported dpa.The offer aims to "overcome the 30% cliff-edge that exists under German takeover law and foster constructive engagement with Commerzbank and its stakeholders in the coming weeks," UniCredit said in a statement.UniCredit already holds a roughly 29% stake in Germany's second-largest private bank, making it its largest shareholder. The German government, which rescued Commerzbank during the 2008-09 financial crisis, holds around 12%.Exceeding a 30% stake legally obliges UniCredit to make a takeover offer to other shareholders.UniCredit said it expects to "achieve a stake in Commerzbank in excess of 30% without reaching control."The offer would allow UniCredit to avoid having to sell shares to stay below the 30% threshold during Commerzbanks ongoing share buyback programme. It would also give the Italian bank greater flexibility to increase its stake further in the future.The exchange ratio will be determined in the coming days. The owners of the Frankfurt-based bank are expected to receive 0.485 new UniCredit shares for each Commerzbank share, which corresponds to a price of €30.80 per Commerzbank share or a premium of 4% over Friday's closing price.This means UniCredit values the German lender at nearly €35 billion.Berlin slams 'hostile' bidUniCredit has been campaigning for a takeover of Commerzbank for months.Chief executive Andrea Orcel has highlighted opportunities in a combined business serving private and small and medium-sized enterprise (SME) customers and argued that Europe needs larger banks to be able to compete with US financial institutions.The move puts UniCredit on a collision course with Commerzbank's management, employee representatives and the German government, all of whom continue to oppose a "hostile" takeover."The government supports Commerzbank's strategy of maintaining its independence. A hostile takeover would be unacceptable, particularly given that Commerzbank is a systemically important bank," a spokesman for the GermanFinance Ministry said following Monday's announcement.Commerzbank confirmed that "the announced takeover bid has not been agreed.""Furthermore, UniCredit's communication does not contain any further information regarding the key elements of a value-creating transaction. That would be the necessary basis for any talks."Commerzbank chief executive Bettina Orlopp noted that "the exchange ratio set out" by UniCredit "effectively offers no premium to our shareholders.""Our top priority is to create sustainable value for our shareholders and all Commerzbank stakeholders. We are convinced of the strength and potential of our strategy, which is focused on independence and profitable growth."Meanwhile, Commerzbank's Management Board and Supervisory Board declared their willingness to review the takeover bid "carefully and in the best interests of the company, its shareholders, employees and customers."The offer is officially due to be submitted in May followed by a four-week acceptance period, with UniCredit planning to convene an extraordinary general meeting by May 4 to seek its shareholders approval for the necessary capital increase.The next Commerzbank annual general meeting is scheduled for May 20.Bid a long time comingIn September 2024, UniCredit took advantage of the German government's partial exit from Commerzbank to acquire a large stake in the bank. In addition to a direct stake of just under 10%, the Italian lender secured access to almost 19% more via financial instruments.At the beginning of July last year, UniCredit converted a good half of these financial instruments into shares and, with around 20%, overtook the German government as Commerzbank's largest shareholder.The current German government has said it does not plan to sell its remaining 12% stake, with Chancellor Friedrich Merz emphasizing that he wants Commerzbank to remain "strong and independent."Commerzbank chief Orlopp has consistently rejected the Italian bank's takeover plans, setting ambitious return targets and higher dividends, and announcing plans to cut some 3,900 jobs – the majority of them in Germany – despite record profits in 2024, in a bid to secure the bank's independence.After posting another strong performance in 2025, Commerzbank recently raised its financial targets.Union representatives have long warned of widespread job cuts if UniCredit were to take control.Sascha Uebel, head of the Commerzbank works council, said the long-anticipated move was "bad for business."He accused UniCredit chief executive Orcel of continuing tactical manoeuvring at the expense of Commerzbank's small and medium-sized business customers and its workforce."This is the next level of audacity. It is not just uncoordinated, it is hostile," Uebel told dpa in Frankfurt, where Commerzbank is headquartered.The works council chief said labour representatives would oppose the takeover "with every possible means," without providing details.(By Alexander Sturm, Jörn Bender and Theresa Münch)
