Commerzbank Shares Slip as Orcel Threatens to Walk Away

UniCredit CEO Orcel issues a take-it-or-leave-it ultimatum for Commerzbank, setting up a May showdown as the target bank touts record profits and political resistance grows.

The high-stakes takeover battle for Commerzbank escalated this week, with UniCredit CEO Andrea Orcel issuing a stark ultimatum. In an interview with Bloomberg TV, Orcel stated his bank’s planned €35 billion voluntary takeover offer, expected in early May, comes with a critical condition. If the bid fails to secure UniCredit control of the Frankfurt-based lender, the Italian group will pause its pursuit entirely and refocus on internal matters.

The Frankfurt institute is mounting a vigorous defense, leveraging its strongest financial performance in years. Management swiftly rejected UniCredit's characterization of the bank as operationally weak and overvalued, pointing instead to a record annual operating profit. Last year, Commerzbank's earnings surged 18% to €4.5 billion.

Financial backers are lining up on both sides. The British investment bank Barclays upgraded Commerzbank stock to 'Overweight' and raised its price target to €42, providing a significant boost to the defense. This contrasts with the average analyst price target of €38 cited by the bank's management. Meanwhile, the market reacted nervously to Orcel's hardened stance. On Wednesday, Commerzbank shares fell approximately three percent, closing at €34.82 in one report and €34.91 in another. Despite the daily drop, the stock remains up roughly 50% year-to-date.

Orcel is also working to address political and labor concerns in Germany. He has argued that a merger would cost fewer than half of the feared 15,000 jobs. Critics, however, note the apparent lack of a premium in the share-exchange offer, a point Orcel contends is already reflected in Commerzbank's elevated share price.

Political resistance in Berlin is firm. The federal government, which holds a stake of nearly twelve percent in Commerzbank, supports the bank's strategy of independence. Chancellor Friedrich Merz recently reaffirmed his strict opposition to a takeover. The works council has also sounded the alarm, labeling the Italian approach as damaging to the business and warning of disadvantages for employees.

The decisive phase begins in May. UniCredit shareholders will vote on the necessary capital increase for the bid on May 4. Just four days later, on May 8, Commerzbank's board will present its new strategic and financial targets through 2030 alongside its quarterly results. These updated goals will provide shareholders with the foundation to evaluate the offer from Milan. If UniCredit proceeds as planned, a final verdict from Commerzbank investors is expected this summer.