Milan (Italy) (AFP) – Italian bank UniCredit wooed shareholders in Germany’s Commerzbank with promises of higher returns on Monday as it hopes to win a 35-billion-euro ($41 billion) takeover battle fiercely opposed by many Germans. UniCredit’s chief Andrea Orcel said his “Unlocked” strategy for Commerzbank would refocus its operations on its core German market to spur faster growth.
“Commerzbank can create much more value than currently, and its current direction is putting its survival at risk in the medium term,” Orcel told financial analysts ahead of the formal opening of the takeover bid. UniCredit, already the largest shareholder in Commerzbank, announced a full takeover in March that drew a frosty response from the German government, which itself owns 12 percent of the bank’s shares.
But Orcel said applying the “UniCredit method”, and investing around 800 million euros between now and 2030 would help push Commerzbank’s net profit to 5.1 billion euros in 2028. That would be well above the 4.2 billion euros predicted for that year by Commerzbank in its own strategy plan presented in early 2025.
If successful, Orcel said he would combine Commerzbank’s operations with those of HypoVereinsbank, UniCredit’s German subsidiary, to create “a solid and competitive German leader, part of a major pan-European group” better able to resist the challenge of “new American players and fintech firms”.
UniCredit also rejected as a “myth” claims that its takeover bid, worth around 30.80 euros for each Commerzbank share, was not high enough. With a direct stake of 26 percent, UniCredit expects it will raise its stake to more than 30 percent, triggering a mandatory takeover for the entire bank.
If the bid fails, Orcel said he would still “come out ahead financially”. “In this case, we will step back and probably people will thank us in two years because maybe we will be able to do a better deal,” he said. Commerzbank shares were up around 1.1 percent at 36.47 euros in midday trading in Frankfurt — well above UniCredit’s offer — while UniCredit shares fell around two percent in Milan to 68.68 euros.
© 2024 AFP
