Commerzbank’s Fate Hinges on Milan Vote as Berlin’s White Knight Search Fails

UniCredit seeks shareholder approval for a capital increase as Commerzbank unveils a defense strategy, with BaFin halting ads and Berlin failing to find a white knight.

The battle for control of Commerzbank enters its most decisive phase this week, with UniCredit seeking shareholder approval for a capital increase in Milan on Monday while the German lender prepares to unveil a beefed-up defence strategy on Friday. The outcome will determine whether Europe’s largest cross-border banking tie-up moves forward or collapses under the weight of regulatory pushback, political opposition, and a yawning valuation gap.

BaFin Pulls the Plug on UniCredit’s Negative Campaign

Germany’s financial watchdog BaFin has dealt UniCredit an early blow by ordering the Italian bank to halt an advertising campaign that targeted Commerzbank. The ads, which described the Frankfurt-based lender as “neglected” and “unsafe,” were deemed sensationalist and lacking objectivity by the regulator. The order was issued under Section 28 of Germany’s Securities Acquisition and Takeover Act, and UniCredit has since removed the advertisements.

The regulatory intervention underscores the increasingly hostile tone of the takeover battle, which has drawn in Berlin, Frankfurt regulators, and European banking circles.

Berlin’s Search for a White Knight Comes Up Empty

Behind the scenes, the German government made informal approaches to several European banks, sounding out whether a strategic investor could acquire a stake in Commerzbank as an alternative to UniCredit’s bid. These exploratory talks ultimately failed to produce a viable candidate.

Berlin, which still holds roughly 12 percent of Commerzbank, has refused to sell its stake to UniCredit. The government’s primary concern is that a merger would shift control of a bank critical to Germany’s Mittelstand — the country’s vast network of small and medium-sized enterprises — to Milan. With no white knight materialising, the political calculus now hinges on whether Commerzbank can convince shareholders that independence is more valuable than a takeover.

The Offer That Doesn’t Add Up

UniCredit CEO Andrea Orcel announced the indicative exchange offer in March 2026: 0.485 UniCredit shares for each Commerzbank share, which at the time valued the German lender at roughly €35 billion. But Commerzbank’s stock has since climbed, pushing its market capitalisation to around €40 billion. The offer now sits well below the current market price, with no premium attached.

Orcel has left the door open to improvement. “If there are further talks in the coming weeks and a compromise emerges, then something could change,” he said. The binding offer is scheduled for Tuesday, 5 May. If UniCredit’s shareholders approve the capital increase on Monday, the formal bid will follow a day later.

Commerzbank’s Defence: Profit Promises and Job Cuts

Commerzbank CEO Bettina Orlopp is preparing a counter-narrative for Friday, when the bank releases its first-quarter results alongside an updated strategy through 2030. The message to investors is straightforward: the bank can create more value on its own than under Italian ownership.

The defence plan includes further job cuts beyond the roughly 4,000 full-time positions already earmarked for elimination. The goal is a dramatic efficiency push that would lift net profit to around €4.2 billion by 2028. Shareholders are being promised direct rewards from this cost-cutting drive, with analysts projecting payout ratios of up to 110 percent over the next two years. Restructuring costs could be partially excluded from dividend calculations, sweetening the deal for investors.

Analysts Warm to the Standalone Story

Bank of America recently raised its price target for Commerzbank shares from €37 to €42, explicitly citing the standalone scenario. The bank’s analysts argue that accelerated capital returns and strong earnings-per-share growth justify higher valuations independent of any takeover premium from Milan.

The timing of Friday’s announcement is no accident. Commerzbank wants to demonstrate that its turnaround has momentum, and that shareholders do not need UniCredit to unlock value. If the Italian bank’s shareholders approve the capital increase and Orcel tables the formal offer on Tuesday, a final outcome could be reached by late June or July 2026.

For now, the ball is in Milan’s court. But Commerzbank is betting that its own pitch — delivered just days after the hostile bid lands — will prove more compelling than anything Orcel can offer.