UniCredit plots Commerzbank shake-up amid takeover pursuit

UniCredit has unveiled plans for a far-reaching shake-up of takeover target Commerzbank with the intention of transforming the German lender for a “new future-ready era.”

Chief executive of UniCredit Andrea Orcel said in a conference call Monday that a “true combination” of UniCredit and Commerzbank would send “a clear signal”, creating a “country leader and benchmark.”

He added that the plan would build a “federal pan-European group and European benchmark for others to follow.”

UniCredit has been eyeing a potential bid for the Frankfurt-based lender since taking a 9% stake in 2024, which has since swelled above the 30% benchmark requiring a mandatory full takeover offer under German financial rules. Commerzbank has previously opposed a merger, emphasizing instead a focus on “independence and profitable growth.”

Commerzbank shares were 0.8% higher around 10:30 a.m. in London (5:30 a.m. E.T.). UniCredit was 2.2% lower in morning dealmaking.

Orcel said UniCredit’s plan would bring together two “highly complementary” lenders, and deliver “significant cross-border value” and “investment firepower” to unlock value generation of 1.1 billion euros ($1.2 billion) by 2030.

Commerzbank has underperformed in recent years, Orcel noted, adding that its existing “momentum” strategy prioritizes growth outside its core markets and implies continued underperformance into 2028.

Orcel said the German lender’s existing path, which is vulnerable to macro conditions, does not address “underlying structural vulnerabilities”, and risks potentially requiring “another painful restructuring” further down the line.

He warned the Frankfurt-based lender risks becoming “increasingly unfit for a banking environment that is changing rapidly”, noting that its current approach does not increase investment in technology and AI.

Instead, Orcel said UniCredit’s “Unlocked” proposal represents a “new chapter” which would strengthen Commerzbank, refocusing on its core markets of Germany and Poland.

Unicredit, Commerzbank’s biggest investor, claims its “Unlocked” approach would add 600 million euros in net profit in 2028 to around 5.1 billion euros ($6.00 ‌billion).

Orcel revealed two potential scenarios for the Commerzbank bid — one in which UniCredit remains below full control, or a situation where the Italian bank reaches control and can offer its shareholders returns above the cost of equity.

If UniCredit takes control, Commerzbank would initially be kept “completely separate and distinct” for 18 months until 2028 as it requires considerable alignment.

But under a subsequent potential “Combination” scenario, a fully transformed “future-ready bank” would be combined with UniCredit-owned HypoVereinsbank, and aligned to the “superior performance” of HVB.

In an earlier statement, UniCredit said Commerzbank is “insufficiently prepared for future challenges” and remains “overly focused on short-term delivery.”

“UniCredit believes that Commerzbank should reposition to be future-ready by accelerating top line growth and focusing on investing and transforming,” the bank added.

Commerzbank said April 7 that it sees “no basis for a mutually agreed value-accretive transaction” following discussions with UniCredit.

It added that the Italian lender had “failed to demonstrate sufficient value creation potential for Commerzbank’s shareholders” beyond its own current standalone strategy.