UniCredit CEO Andrea Orcel has stated that gaining full control of German rival Commerzbank is “not the expected scenario,” even as the Italian lender launches a tender offer to boost its stake beyond 30%. Despite this, Orcel asserts that UniCredit’s growing influence has already prompted positive changes at Commerzbank, while UniCredit itself reports record first-quarter earnings. The bid, however, faces pushback from Commerzbank’s leadership.
In a significant development for the European banking landscape, UniCredit CEO Andrea Orcel stated Tuesday that gaining full control of German rival Commerzbank is currently 'not the expected scenario.' Orcel's remarks to CNBC came as the Italian lender initiated a tender offer designed to substantially increase its stake in the German institution, a move that has already sparked considerable discussion.
Orcel conveyed his perspective, acknowledging the ongoing tender offer but tempering expectations regarding a complete takeover. He explained, "Should we achieve control, an outcome not currently envisioned, our actions would be unequivocal, generating exceptionally positive returns for both our shareholders and those of Commerzbank. Ultimately, the decision rests with them." He further added, "We remain focused on execution and have engaged extensively; now, we await the shareholders' verdict."
The tender offer aims to push UniCredit's holding in Commerzbank past the 30% regulatory threshold, building on its existing 28% stake, which has been steadily accumulated since 2024. UniCredit shareholders recently approved the issuance of 470 million new shares for potential exchange in the offer.
Despite downplaying outright control, Orcel highlighted that UniCredit's growing influence has already spurred Commerzbank to "review everything they need to review and try to extract more value, be more ambitious [and] change things in a better way." He emphasized UniCredit's belief in focusing on core business, suggesting Commerzbank should concentrate its efforts on Germany and Poland rather than external ventures. UniCredit's position, Orcel noted, remains clear and will be observed quarter by quarter.
The CEO's interview followed UniCredit's announcement of its first-quarter earnings, marking the bank's 21st consecutive quarter of profitable growth and its strongest quarter on record. Net profit surged by 16.1% year-on-year to 3.2 billion euros ($3.74 billion), significantly surpassing analyst expectations of 2.8 billion euros. UniCredit shares experienced a nearly 5% gain in early Tuesday trading.
Orcel reiterated that any outcome from the increased stake in Commerzbank would be a "win-win" for UniCredit shareholders. He elaborated, "[If] we end up below control, hopefully above 30% but below control, the financial returns of what we would do there would be exceptional, because we would be well above 20% returns." He added that these returns would bolster UniCredit's own results, and if Commerzbank improves as expected, it's a bonus. Should things go unfavorably, UniCredit holds a put option as a hedge.
Commerzbank's Resistance to Takeover
UniCredit's assertive moves to increase its stake have met with resistance in Germany. Commerzbank's Deputy CEO Michael Kotzbauer voiced strong opposition in an interview with Frankfurter Allgemeine, stating that a UniCredit takeover would "dismantle Commerzbank's business model." Kotzbauer criticized UniCredit's plan for breaking up the bank's client service model and offering no premium to shareholders, citing widespread support for an independent Commerzbank within the German business community.
Addressing the broader need for consolidation in the European banking sector, Orcel argued that Europe must think beyond just the financial industry to enhance its economic competitiveness. He stressed the importance of unity across various sectors, including banking, capital markets, energy, and defense, to safeguard European values and culture as a stronger economic bloc. Calls for greater unity in European finance have also come from influential bodies like the IMF and Norway's $2 trillion sovereign wealth fund.
