Italy’s UniCredit has raised its potential stake in Germany’s Commerzbank to 28%, signaling a bold strategic move under the leadership of CEO Andrea Orcel.
The increase, achieved through the use of derivatives, has intensified speculation over whether UniCredit will pursue a full takeover of Commerzbank or focus on its concurrent bid for Italy’s Banco BPM.
This development comes as the German government, which still holds a 12% stake in Commerzbank, remains cautious about the Italian bank’s growing influence. UniCredit’s latest move raises questions about its broader strategy and ambitions in Europe’s banking sector.
UniCredit announced on Wednesday that it had increased its stake in Commerzbank from 21% to 28%, with 9.5% held directly and the remaining 18.5% secured through derivative instruments. The bank is also seeking authorization from the European Central Bank (ECB) to raise its stake to as much as 29.9%, just below the 30% threshold that would trigger a mandatory takeover offer under German law.
“This move reinforces UniCredit’s view that substantial value exists within Commerzbank that needs to be crystallized,” the bank said in a statement.
The bank emphasized that its investment in Commerzbank remains “solely an investment” and that the move does not impact its ongoing €10 billion ($10.49 billion) bid for Banco BPM, Italy’s third-largest bank.
UniCredit’s actions have sparked speculation about its long-term intentions for Commerzbank. While the Italian lender maintains that it is simply an investor, analysts believe the move could be part of a larger strategy to position UniCredit as a dominant player in European banking.
The strategic benefits of a merger with Commerzbank are clear. UniCredit already operates in Germany through its subsidiary HypoVereinsbank (HVB), and a merger could create synergies in capital markets, advisory services, payments, and trade finance. Some analysts believe this combination could boost operational efficiencies and generate cost savings.
However, the German government has thus far resisted any moves toward a takeover. The state still holds a 12% stake in Commerzbank following a bailout during the 2008 financial crisis and is reportedly wary of ceding control to a foreign entity. Earlier this year, Germany reduced its stake by 4.5% but has shown no indication of fully exiting the bank.
Commerzbank responded cautiously to the news, stating it had “taken note of the announcement” but declined to comment further. The bank said it remains focused on its own strategic plan, which it will present to investors on February 13.
Commerzbank, Germany’s second-largest lender, has been undergoing a transformation to improve profitability. The bank has closed branches, reduced its workforce, and implemented digitalization initiatives. Analysts believe that if UniCredit succeeds in increasing its stake, it may push for further operational changes or pursue a full merger.
UniCredit has applied for clearance from the ECB to increase its Commerzbank stake to 29.9%. The approval process can take up to 90 working days from the date the bank submits all required documents, and industry insiders expect the ECB to use most of this period before issuing a decision.
Given the complexity of the case, the ECB’s review will likely examine the competitive impact on the European banking sector and the broader implications for financial stability. If approved, the move would bring UniCredit closer to the threshold that would require it to launch a formal takeover bid for Commerzbank.
UniCredit’s pursuit of Banco BPM, Italy’s third-largest bank, adds another layer of complexity to its strategic play. In November, UniCredit made a €10 billion offer for Banco BPM, but the proposal is currently priced at a 14% discount to BPM’s market value.
Analysts believe UniCredit may have to improve its offer or introduce a cash component to win over BPM shareholders. The bank is under pressure from Italian regulators and local investors to prioritize domestic consolidation over cross-border deals like the one with Commerzbank.
UniCredit CEO Andrea Orcel has stated that his bank cannot afford to be left out of consolidation trends in its home market, especially as rivals like Intesa Sanpaolo strengthen their positions in Italy. Orcel also noted that expansion efforts in Germany would be paused until a new German government is in place, a reference to the collapse of Germany’s ruling coalition and upcoming elections in February.
The market responded positively to UniCredit’s moves, with shares of UniCredit rising 1.1% in London on Wednesday, while Commerzbank shares climbed 3.1%. Investors see the potential for UniCredit to profit from its increased stake in Commerzbank, especially since the bank said its average entry price for the stake is below current trading levels.
UniCredit has signaled that it could remain a passive investor, push for operational improvements at Commerzbank, or even sell its stake for a profit if market conditions change. This approach gives UniCredit the flexibility to respond to market developments while pursuing its dual-track strategy in Italy and Germany.
Some analysts believe UniCredit’s move could pave the way for a transformative merger with Commerzbank, while others argue it is a way to exert influence over the German lender without launching a full takeover. By holding a substantial minority stake, UniCredit can influence Commerzbank’s strategic direction, especially if it secures seats on the board.
On the other hand, skeptics note that the German government’s 12% stake and its control over regulatory approvals give Berlin a powerful say in any potential merger. Given the state’s previous resistance to UniCredit’s courtship of Commerzbank, analysts believe that UniCredit may be trying to create a position of strength before negotiating with German officials.
UniCredit’s next moves will likely depend on regulatory approval from the ECB and political developments in Germany. If the ECB authorizes UniCredit’s stake to rise to 29.9%, it could bring the bank closer to a formal takeover bid for Commerzbank. However, UniCredit has said it is prepared to remain a passive investor, which could also position it to benefit from any future gains in Commerzbank’s stock price.
Meanwhile, UniCredit’s pursuit of Banco BPM in Italy continues. Pressure is mounting for CEO Andrea Orcel to sweeten his offer or introduce a cash component, especially as domestic consolidation in Italy intensifies. Orcel’s “dual pursuit” strategy — seeking consolidation both at home and abroad — has raised eyebrows, but if successful, it could place UniCredit in a commanding position in both the Italian and German banking sectors.
UniCredit’s decision to increase its stake in Commerzbank to 28% signals CEO Andrea Orcel’s bold strategy to gain influence in the German lender while simultaneously pursuing a domestic merger with Banco BPM. While the bank insists it is merely an investor, its application for ECB approval to raise its stake to 29.9% hints at larger ambitions. The German government’s opposition and its 12% stake in Commerzbank remain significant hurdles.
