Berlin Draws a Line in the Sand as UniCredit Tightens Its Grip on Commerzbank

Germany considers a €5 billion KfW stake to block UniCredit's hostile takeover of Commerzbank, as shares surge 52% and a May showdown looms.

Germany’s government is weighing a multibillion-euro intervention to block UniCredit’s hostile advance on Commerzbank, as the Italian lender’s formal exchange offer lands well below the market price. The political pushback has sent Commerzbank shares to fresh multiyear highs, while management prepares to unveil its own defence strategy.

The 25% Barrier

The federal government, which holds roughly 12% of Commerzbank through its bank rescue fund, is now exploring an increase to a blocking minority of 25% via the state-owned KfW. Such a move would require an estimated €5 billion outlay. Coalition sources describe the potential stake-building as a last-resort measure to fend off a hostile takeover of a systemically important institution.

“This approach is completely inappropriate and unfair,” government spokesman Steffen Hille said, with the finance ministry adding that a hostile takeover of a systemically relevant bank is “not acceptable.” Labour union Verdi has echoed the sentiment, warning that only an independent Commerzbank can preserve its branch network and service to Germany’s Mittelstand.

UniCredit’s Hidden Leverage

UniCredit has already built a formidable position. Through Nomura swaps, the Milan-based lender secured access to an additional 5.56% of voting rights, giving it effective control of around 35% of shares. Financial investor Jefferies adds another 11.09% voting stake, held almost entirely via options and swaps.

The formal offer values each Commerzbank share at 0.485 new UniCredit shares, equating to roughly €31 to €34 at the time of announcement — a significant discount to the current market price. UniCredit chief Andrea Orcel has labelled Commerzbank a “permanent underperformer,” a characterisation that Commerzbank CEO Bettina Orlopp forcefully rejected, arguing the Italian bank misunderstands the German lender’s business model and its importance to the country’s industrial backbone.

Market Momentum

Investors have largely shrugged off the below-market bid. Commerzbank shares climbed 4% on Wednesday to €37.06, just shy of the 52-week high of €37.75. The stock has surged roughly 52% over the past twelve months, with the relative strength index signalling strong momentum. Over the past 30 days alone, the share price has gained 17.5%.

Analysts view the Italian offer as unattractive given the discount to the current trading level. UniCredit, meanwhile, is negotiating from a position of strength, having reported a record first-quarter profit of €3.2 billion and a return on equity of 26%.

The May Showdown

Commerzbank’s defence will take centre stage on Friday, 8 May, when the bank releases quarterly results alongside a strategic update extending to 2030. Management is expected to set more ambitious profitability targets and deeper cost-cutting measures. If Orlopp can convince analysts that earnings will climb to roughly €3.5 billion this year, it would complicate any attempt by UniCredit to improve its offer.

The annual general meeting follows on 20 May, with UniCredit’s formal offer period closing on 16 June 2026. By then, Berlin will have to decide whether to back its tough rhetoric with hard cash. Verdi has warned that UniCredit’s internal plans could see up to 7,000 job cuts, with workers’ representatives fearing as many as 10,000 redundancies in Germany in the event of a full merger.