UniCredit takeover bid for Commerzbank reaches closing stage in Germany

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UniCredit-Commerzbank takeover closing

Highlights

UniCredit's takeover bid for Commerzbank reached a 41.9% holding with 11.91% tendered as of Monday, with the offer closing June 16 and a two-week extension ending July 3.
UniCredit seeks to surpass the 30% ownership threshold but aims to avoid full control status to limit negative capital impact, pending European Central Bank authorization expected after Q3.
Berlin officially rejects UniCredit's bid while Commerzbank's CEO signals openness to negotiations for a higher premium and business guarantees, with integration and headquarters location still unresolved.

Bid timetable and ownership structure

As reported by Reuters, UniCredit is due later on Tuesday to publish its daily update on shares tendered up to the usual 1200 GMT cut-off, with the outcome including shares submitted by midnight Frankfurt time set for release on June 19.

Although the offer officially ends on June 16, investors still have a further two-week period from June 20 to July 3 to tender their shares under unchanged terms. UniCredit says it will publish the final outcome of that extended process on July 8.

Take-up stands at 11.91% of Commerzbank's capital on Monday, giving UniCredit an overall holding of 41.9% when combined with its previously built 26.77% equity stake and 3.22% in share-settled derivatives. The bank also holds 13.19% of Commerzbank through cash-settled derivatives.

UniCredit says the purpose of the voluntary offer is to lift its stake above the 30% threshold, allowing it to buy more Commerzbank shares on the market next year once the process concludes. The European Central Bank's authorisation is still needed for the process to be completed and is not expected before the third quarter.

Capital constraints and integration questions

UniCredit says it wants to avoid being deemed in control of Commerzbank with less than 50% plus one share, because minority stake accounting rules would cut 280 basis points from its core capital ratio, compared with 200 basis points in a majority ownership scenario.

To avoid that outcome, the bank could use its cash-settled derivatives to reduce its stake. If counterparties agree, it could also convert those contracts into share-settled swaps to move to majority ownership.

Even if UniCredit secures majority control, it says it would need a couple of years to implement changes at Commerzbank as a standalone company before integrating it with its German unit HVB. The bank has not clarified how the combined group would be structured or whether its base would be in Frankfurt, where Commerzbank is headquartered, or Munich, where HVB is based.

Berlin on Tuesday officially rejects the offer and reiterates its opposition to UniCredit's plans. UniCredit also signals it could seek enough votes at shareholder meetings to appoint all investor representatives on Commerzbank's supervisory board, while Commerzbank CEO Bettina Orlopp says she remains open to talks if a higher premium and guarantees for the bank's business model are offered.

Orlopp also says any combined structure should reflect Germany as the main market. UniCredit rules out moving the group's head offices to Germany, although the article says Italian authorities are concerned Chief Executive Andrea Orcel could still agree to such a move to ease German resistance.

In our earlier article, we examined the European Banking Authority’s proposals for targeted changes to the EU bank capital framework, aimed at simplifying overlapping requirements rather than cutting overall safeguards. We noted measures such as merging certain buffers and adjusting leverage-ratio guidance for a group of large banks, while the regulator pushed back against deeper reforms that could weaken resilience.

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