Key Takeaways:
Commerzbank's chief executive has dropped her long-standing opposition to a tie-up with UniCredit, opening the door to one of Europe's largest cross-border bank mergers.
Commerzbank CEO Bettina Orlopp told employees the bank will hold further talks with UniCredit as the Italian lender's €45 billion ($51.8 billion) hostile approach nears a majority stake, ending months of resistance to a tie-up.
"In the weeks and months ahead, Commerzbank and UniCredit will engage in discussions to determine, step by step, how to move forward," Orlopp said in an internal post seen by Reuters.
UniCredit has built a nearly 48 percent stake in Commerzbank since September 2024, while the German government still holds 12 percent from its financial-crisis bailout. Commerzbank posted a 94 percent profit gain in its most recent quarter, strengthening Orlopp's negotiating position.
A deal would reshape Germany's banking sector and test whether cross-border consolidation can work in the euro zone, where policymakers have pushed for larger banks to compete with U.S. rivals but national politics has repeatedly blocked mergers.
UniCredit CEO Andrea Orcel has said he wants to negotiate directly with the German government and employee representatives, bypassing Commerzbank management. The German Finance Ministry, which oversees the government's 12 percent stake, declined to comment on the latest developments.
Orlopp acknowledged the shift in tone. "The German federal government, employee representatives, and our supervisory board have all made clear that they now expect UniCredit to engage with Commerzbank constructively," she said. "And I think UniCredit is ready for that, too. Because without dialogue, there can be no value creation."
The two banks have held several rounds of talks in past months, but all fizzled out in disagreement. Orlopp and her management team had long opposed a tie-up, arguing that Commerzbank's independence served Germany's financial system better. Handelsblatt first reported Orlopp's latest statements.
German opposition to Orcel's overtures has been widespread, reflecting the difficulty of merging large banks across euro zone countries. The broader European banking sector is undergoing a consolidation wave — Intesa Sanpaolo launched a €30.6 billion bid for Monte dei Paschi di Siena in June, while Banco BPM recently ended merger talks with MPS after Credit Agricole rejected the plan. Credit Agricole separately told Rome it plans to raise its stake in Banco BPM to near 30 percent.
For UniCredit, the deal would give it access to Germany's corporate lending market, the largest in Europe. For Commerzbank shareholders, a takeover at a premium to the current share price would deliver immediate value. The German government's 12 percent stake, held since the 2008 bailout, would also be monetized.
Orlopp said a goal was to strengthen the bank's systemic relevance to Germany, "and we intend to keep it that way." The next steps remain unclear, but Orlopp's latest statement suggests the two sides may be converging on a negotiated path forward. UniCredit's near-majority stake gives Orcel significant leverage, but German political opposition and employee concerns could still complicate any final agreement.
This article is for informational purposes only and does not constitute investment advice.
