Commerzbank Dangles €2.7bn Capital Return as UniCredit’s Offer Falls €2 Below Market Value

Commerzbank AGM: Shareholders back independence as management warns UniCredit bid would destroy €1bn revenues, approves €1.10 dividend and €1.5bn buybacks.

Commerzbank’s annual general meeting in Wiesbaden became a stage for two starkly different visions: management’s promise of generous cash rewards and a warning that accepting UniCredit’s bid would cost shareholders dearly. With 99.88% of votes backing the proposed dividend and near-unanimous approval for the board, the message was unequivocal — investors prefer independence, at least for now.

The centrepiece of the defensive strategy is a capital return programme totalling €2.7bn. That includes a €1.10 per share dividend for 2025, worth roughly €1.2bn, and €1.5bn of completed share buybacks. Together, the payout matches 100% of net profit after AT-1 coupons and before restructuring charges. Fresh authorisations allow the bank to repurchase up to an additional 10% of its share capital, subject to approval from the European Central Bank and the German Finance Agency. Management also plans to gradually raise the cash dividend component of total distributions to at least 50%.

Chief executive Bettina Orlopp used the AGM to bluntly reject UniCredit’s exchange offer of 0.485 of its own shares for each Commerzbank share. She argued the implied economic value sits almost two euros below the current market price. According to internal calculations, folding Commerzbank into UniCredit’s structure would destroy more than €1bn of revenues through integration losses. Orlopp described the Italian lender’s plans as vague and warned of underestimated restructuring costs.

Against that, Orlopp laid out the “Momentum 2030” strategy, targeting a return on equity of 21% and net profit of €5.9bn, backed by job cuts and increased investment in artificial intelligence. The first quarter of 2026 provided some immediate ammunition: net profit rose 9.6% to €913m, reinforcing the argument that standalone execution is already delivering results.

Chairman Jens Weidmann sharpened the attack, pointing to UniCredit’s heavy exposure to Italian sovereign bonds, its portfolio of non-performing loans, and its Russia-linked business. He accused the Italian bank of misleading communication and said the offer would force Commerzbank shareholders to assume new risks they did not sign up for. “The economic case for the exchange is weaker than the independent path,” he told the assembly.

Not everyone was comfortable with how the battle is playing out. Hendrik Schmidt at DWS noted that UniCredit, as the largest single shareholder, stands to collect roughly €350m of the proposed €1.10 dividend — a windfall from the very capital return designed to fend it off.

UniCredit currently owns around 30% of Commerzbank directly and has secured voting rights on 38.87% through derivatives and other instruments. The German government retains a 12% stake and has publicly opposed a takeover. Shareholders have until 16 June 2026 to tender their shares, with a possible extension to 3 July.

The stock itself reflects the tension. Commerzbank shares closed at €37.15 on Wednesday after touching €37.26 during the session, leaving them just 1.30% below their 12-month high. Over the past year, the stock has gained 42.56%, though the relative strength index of 81 flags an overbought condition in the near term.

The AGM has shifted the balance of power without breaking the deadlock. UniCredit may command a large voting block, but broad shareholder support remains elusive. Commerzbank’s defence now rests on delivering what it can directly control: record cash returns, a credible profit roadmap, and the conviction that staying independent will ultimately prove more rewarding than accepting a below-market offer.