UniCredit has unveiled plans to extensively revamp its target, Commerzbank, with the aim of transforming the German financial institution into a “new era of future-readiness”.
UniCredit CEO Andrea Orcel said in a conference call on Monday that a “true combination” of UniCredit and Commerzbank would send a “clear signal” and create a “national leader and benchmark.”
He added that the plan would create a “pan-European grouping of federations and a European benchmark for other countries to follow.”
UniCredit has been eyeing a potential takeover in the Frankfurt-based lender since acquiring a 9% stake in 2024, but its stake has since ballooned above the 30% threshold that requires an outright takeover offer under German financial rules. Commerzbank had previously opposed the merger, stressing instead that it would focus on “independence and profitable growth.”
Commerzbank shares were up 0.8% at around 10:30 a.m. ET in London. UniCredit fell 2.2% in morning trading.
Commerzbank.
Mr. Orcel said UniCredit’s plan would bring together two “highly complementary” financial institutions, bringing “significant cross-border value” and “investment firepower” and enabling value creation of 1.1 billion euros ($1.2 billion) by 2030.
Mr. Orcel noted that Commerzbank has underperformed in recent years, adding that its existing “momentum” strategy prioritizes growth outside its core markets, suggesting continued underperformance until 2028.
Orcel said the existing path for German financial institutions, which are susceptible to macro conditions, did not address “fundamental structural weaknesses” and could require “further painful restructuring” in the future.
“New chapter”
He warned that the Frankfurt-based lender risks becoming “increasingly unsuited to the rapidly changing banking environment”, noting that its current approach will not result in increased investment in technology and AI.
Instead, Mr. Orcel said UniCredit’s “unlocked” offer represents a “new chapter” that strengthens Commerzbank and refocuses it on its core markets of Germany and Poland.
UniCredit, Commerzbank’s biggest investor, claims its “unlocking” approach will increase net profit by 600 million euros to about 5.1 billion euros ($6 billion) in 2028.
Orcel identified two potential scenarios for Commerzbank’s bid. One is a scenario in which UniCredit remains in full control, and the other is a situation in which the Italian bank gains control and is able to provide shareholders with a return above its cost of equity.
unicredit.
If UniCredit were to take over, Commerzbank would initially be kept “completely separate and distinct” for 18 months until 2028, as significant adjustments would be necessary.
However, a potential subsequent ‘consolidation’ scenario would see a fully transformed ‘future-ready bank’ merge with UniCredit-owned HypoVereinsbank and align with HVB’s ‘superior performance’.
UniCredit said in an earlier statement that Commerzbank was “inadequately prepared for future challenges” and remained “overly focused on short-term repayments.”
“UniCredit believes that Commerzbank should prepare for the future by accelerating sales growth and focusing on investment and transformation,” the bank added.
Commerzbank said on April 7 that after discussions with UniCredit, “we see no basis for a mutually agreed value accretion transaction.”
It added that the Italian financial institution “has not been able to demonstrate sufficient value creation potential for Commerzbank shareholders” beyond its current standalone strategy.
