UniCredit Forces Commerzbank Showdown With Exchange Offer

UniCredit escalated its eighteen-month campaign for Commerzbank this week by launching a voluntary exchange offer designed to push its stake above the 30 percent threshold that triggers mandatory takeover obligations under German law. The Italian lender, which already holds a direct stake of roughly 26 percent plus an additional four percent through total return swaps, said the offer is intended to overcome the "cliff-edge" at 30 percent and foster constructive engagement with Commerzbank's management and stakeholders.

THE MECHANICS OF THE BID

UniCredit is offering Commerzbank shareholders an exchange ratio of 0.485 UniCredit shares per Commerzbank share, implying a price of approximately 30.80 euros per share, representing a four percent premium to the closing price on March 13. The offer terms are subject to final determination by BaFin, the German financial regulator, based on three-month volume-weighted average prices for both banks. The formal offer is expected to launch at the beginning of May, with a four-week acceptance period, and settlement could extend into the first half of 2027 pending regulatory clearances.

Crucially, UniCredit has stated that it does not expect to achieve control of Commerzbank through the offer. The board described the bid as "a sensible, pragmatic measure with no downside," noting that the existing stake is "significantly value-accretive" regardless of whether the offer results in an increased holding above 30 percent or not.

BERLIN DRAWS A RED LINE

Chancellor Friedrich Merz said Berlin backs Commerzbank's independence, and on Tuesday Boris Rhein, the premier of Hesse — the state where Commerzbank is headquartered — called on UniCredit to submit a concrete offer and clarify its intentions.

The German government retains roughly 12.7 percent of Commerzbank, a legacy of the bailout that rescued the bank during the 2008-2009 financial crisis. Berlin has said it does not intend to sell its remaining stake. The political dimension is amplified by trade union warnings of extensive job losses should UniCredit gain operational control.

ORLOPP'S INDEPENDENCE STRATEGY

Commerzbank CEO Bettina Orlopp has consistently opposed UniCredit's advances, presenting an alternative vision of independent growth anchored in ambitious return targets, elevated dividend expectations, and a restructuring programme that includes the elimination of approximately 3,900 positions, predominantly in Germany. The bank recently revised its financial objectives after another strong earnings year, arguing that it can deliver shareholder value without ceding control to a foreign acquirer.

THE ROAD TO MAY

UniCredit plans to convene an extraordinary general meeting by May to seek shareholder authorisation for the capital increase needed to fund the exchange offer. The bank is also seeking shareholder approval for a 4.75 billion euro share buyback at its annual general meeting on March 31.