Italy's UniCredit nears majority of Commerzbank shares in takeover bid

Italy's UniCredit is nearing a majority stake in its German rival Commerzbank, the lender said on Wednesday, in the latest step of its takeover bid. 

The Milan-based bank said that "shares representing 17.60% of Commerzbank's outstanding share capital have been tendered," calling the result "well ahead of original expectations."

Along with its pre-existing 26.77% stake and additional financial instruments, the lender now controls 47.59% of Commerzbank shares, amounting to 49.65% rights. 

UniCredit chief Andrea Orcel wants to merge the two banks to create a European lending powerhouse. 

He argues the deal could generate billions of euros in savings, and the elimination of around 7,000 jobs at Commerzbank, Germany's second-largest private bank.

The Italian lender first acquired a stake in Commerzbank in September 2024, before launching its takeover bid in early May. 

If UniCredit secures more than 50% of Commerzbank's shares, it would be able to exert decisive influence over the German bank's management.

This would require approval from authorities such as the European Central Bank and competition regulators in the European Commission. 

Commerzbank chief executive Bettina Orlopp strongly opposes the hostile takeover bid, as does the German government.

The German state, whose partial sale of its Commerzbank stake in September 2024 enabled UniCredit to become the lender's largest shareholder, has said that it has no intention of selling its remaining stake of just over 12%.

Commerzbank open to talks

Responding to UniCredit's announcement, Commerzbank said it was open to a constructive dialogue, calling for a "mutually agreed solution" with its management, employees and the German government. 

However, the Frankfurt-based bank also reiterated doubts about the takeover bid, alleging that the proportion of shares tendered by professional and retail investors amounted to less than 2%. 

"The shares tendered originate predominantly from banks and parties affiliated with UniCredit," the bank said.

The German government meanwhile doubled down on its opposition, with a Finance Ministry spokesman warning that "UniCredit's aggressive and hostile approach remains unacceptable."

UniCredit pleased with 'further step'

As part of the tender offer, UniCredit offered 0.485 of its own shares for each Commerzbank share.

For much of the offer period, the value of the shares UniCredit was offering in exchange for Commerzbank stock was below Commerzbank's market price, giving shareholders little incentive to accept the bid.

However, the proposal became more attractive as UniCredit's own share price rose.

"The completion of the tender offer periods represents a further step in the execution of UniCredit's strategic investment in Commerzbank," the Milan-based bank said.

"UniCredit continues to seek to engage constructively with all relevant stakeholders while pursuing the necessary regulatory and supervisory processes in relation to its investment."