Germany’s government is exploring a last-ditch plan to thwart UniCredit’s €35 billion ($40.9 billion) takeover of Commerzbank by increasing the state’s 12% stake in a lender it deems critical to its economy.
"It should be viewed as a last resort if all other options fail," said Armand Zorn, an influential member of the Social Democratic Party, adding that the government should "continue to signal that a hostile takeover of Commerzbank is not in the interests of Germany's financial centre."
The proposal involves using state-owned bank KfW to buy more shares, potentially creating a blocking minority of over 25% at a cost of at least €4.5 billion. The move comes after UniCredit, which already owns nearly 30% of Commerzbank, formally launched a share-swap offer that values the German lender at €30.80 per share, below its recent trading price of around €35.
At stake is the future of Germany’s second-largest listed bank, a key financier to the Mittelstand firms that form the country's industrial backbone. Berlin’s intervention would mark a significant act of financial protectionism within the EU, pitting national interest against UniCredit CEO Andrea Orcel’s vision for cross-border banking consolidation as the bid’s June 16 expiry nears.
Orcel's €35 Billion Gambit
UniCredit CEO Andrea Orcel has pursued Commerzbank since 2024, methodically building a stake of nearly 30%. On Tuesday, backed by a record quarterly profit of €3.22 billion, the Italian bank formalized its intentions with a voluntary share exchange offer of 0.485 new UniCredit shares for each Commerzbank share.
The offer’s success is far from certain. With Commerzbank shares trading around €35, the bid’s implied value of €30.80 offers little incentive for investors to tender their shares. Analysts suggest the lowball offer is a tactic to force engagement after what Orcel described as 18 months of stonewalling from Commerzbank's management. "Making an offer was a way of saying: Now there's an offer. Why don't we use this opportunity to talk and reach an agreement?” Orcel said.
Berlin's Last Resort
Resistance in Germany is fierce, spanning the government, corporate clients, and the bank's own leadership. Commerzbank’s deputy chairman, Michael Kotzbauer, accused UniCredit of planning to "dismantle" the German lender. The core fear is deep job cuts, with Orcel having signaled that about 7,000 full-time roles in Germany could be eliminated in a merger, on top of nearly 14,000 positions Commerzbank has already shed this decade.
The German government, which acquired its 12% stake during a financial crisis-era bailout, now faces a critical decision. Using state bank KfW, which helped bail out Lufthansa during the pandemic, to build a blocking stake is a drastic step with a price tag of at least €4.5 billion. However, inaction could be seen as a blow to Berlin's authority after it repeatedly warned UniCredit against the takeover.
This article is for informational purposes only and does not constitute investment advice.