By Joshua Kirby
Commerzbank said it rejected a turnaround proposal from its largest shareholder UniCredit, which is eyeing a takeover of the German lender.
UniCredit on Monday outlined a plan to boost performance at Commerzbank, involving an investment of around 1.7 billion euros ($2 billion) in technology and re-skilling staff that it said would boost the lender's bottom line by some hundreds of millions of euros over the next couple of years.
UniCredit, which last month ratcheted up its lengthy courtship of Commerzbank with a move aimed at bringing the latter's management to the negotiating table, said the Frankfurt-based group's current trajectory marks "a story of operating underperformance." The bank is "insufficiently prepared for future challenges," UniCredit said, as it pushed its case that a full merger would solve Commerzbank's problems. Full ownership could cost UniCredit around 24 billion euros, according to recent offer prices.
But the German bank reiterated Friday that it is better off alone.
"The bank reaffirms the significant upside potential of its independent strategy, which delivers proven value with limited execution risk," Commerzbank said in a release. The lender said it had tried to engage with UniCredit but that its largest shareholder had not put forward a concrete plan for a worthwhile tie-up.
"What UniCredit has presented today is not a value-creating business combination," Chief Executive Bettina Orlopp said. "It is a stand-alone restructuring proposal that has to be evaluated against the existing strategy of Commerzbank that delivers real, reliable value with limited execution risk."
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
04-20-26 1249ET
