Rome Backs Milan as Berlin Digs In: The Commerzbank Battle Lines Harden

The fight for Commerzbank is escalating on two fronts — political and financial — and neither side is showing any sign of backing down. Italian Finance Minister Giancarlo Giorgetti has thrown his weight behind UniCredit’s takeover bid, directly challenging German Chancellor Friedrich Merz’s opposition. But Giorgetti’s support comes with a non-negotiable condition: UniCredit’s headquarters must stay in Italy, not migrate to Frankfurt.

UniCredit chief Andrea Orcel, meanwhile, is turning up the heat on Commerzbank’s management. He has laid out a stark vision of what a combined entity could achieve, arguing that the German lender’s current strategy is masking deep-seated problems with a tailwind from low interest rates. Orcel is calling for a radical overhaul, including a retreat from underperforming foreign markets.

Commerzbank CEO Bettina Orlopp is pushing back hard. She insists the bank can thrive on its own and warns that a hostile takeover would destabilise Germany’s Mittelstand — the small and mid-sized companies that form the backbone of the economy. In her view, UniCredit’s plan is not a value-creating merger but a brutal restructuring exercise.

The market is watching the war of words with unease. Commerzbank shares slipped 3 percent to around €34.82 on Thursday, though they remain up roughly 45 percent year-to-date. The stock’s volatility reflects deep investor uncertainty about the outcome.

The Numbers Behind Orcel’s Pitch

Orcel has put a concrete figure on the potential upside. He reckons that under UniCredit’s stewardship, Commerzbank’s net profit could hit €5.1 billion by 2028 — well above the consensus forecast of €4.5 billion. The key lever is a merger with UniCredit’s German arm, Hypovereinsbank. Combining the two would slash total costs from more than €8 billion today to under €6 billion by 2030.

The cost in jobs would be severe. Orcel has flagged up to 7,500 redundancies — nearly double the 3,900 cuts that Orlopp has pencilled into her own strategic plan. Orlopp has dismissed the offer as “hostile” and says UniCredit has failed, even after 18 months, to demonstrate a convincing case for a tie-up.

Should investors sell immediately? Or is it worth buying Commerzbank?

A Bid Below the Market

UniCredit’s voluntary takeover offer is based on an exchange ratio of 0.485 UniCredit shares for each Commerzbank share, valuing the German lender at roughly €32 per share. That is well below the current market price of around €34.82, meaning investors are pricing Commerzbank higher than UniCredit is willing to pay. The gap makes a successful takeover unlikely unless UniCredit raises its offer.

UniCredit already holds just under 30 percent of Commerzbank. To gain control, it would need a clear majority of shareholders — and that would almost certainly require a higher price. As long as the bid sits below the market, the odds are stacked against Orcel.

The May Showdown

The next big test comes on May 8, when Commerzbank reports first-quarter results. Analysts expect a modest profit rise on revenue of just over €3 billion. RBC has upgraded the stock to “outperform” but warns explicitly about the speculative risks tied to the takeover saga.

Then, on May 20, shareholders gather for the annual general meeting in Wiesbaden. The board is pushing for two key votes: a proposed dividend of €1.10 per share for 2025, and authorisation for share buybacks of up to 10 percent of the company’s capital. If both pass, management will have a powerful tool to defend independence — a high share price remains Orlopp’s strongest shield against Milan’s advances.

For now, the political and financial chessboard is set. Berlin is blocking, Rome is backing, and the shareholders will soon have their say.