(Alliance News) - After 18 months of groundwork, UniCredit has moved on Commerzbank with an exchange offer (OPE) featuring a modest 4% premium, which has already been overtaken by market prices.
As reported Monday in La Repubblica's A&F-Affari&Finanza supplement, the bank led by Andrea Orcel holds a 26.7% stake, rising to 32.64% including derivatives, and aims to exceed 40% to secure shareholder meeting control. Should this fail, the group is prepared to pause for 12-18 months, weighing alternatives such as restarting its EUR4.75 billion buyback program or pursuing new deals in Italy.
On the domestic front, UniCredit is bolstering its presence in Assicurazioni Generali with an 8.72% stake, up from 6.7% in April 2025, representing an investment exceeding EUR5 billion, classified as financial. Potential developments involving Monte dei Paschi di Siena and Banco BPM also remain in the background.
In Germany, however, the transaction faces political and industrial headwinds. CEO Bettina Orlopp has rejected the offer, arguing it fails to create value, while the German government, which retains a 12% stake, has labeled it 'hostile and unacceptable'. Market dynamics also present challenges: the exchange ratio initially valued Commerzbank at EUR30.8 per share, later rising above EUR31, yet the stock is currently trading at EUR34.4, a roughly 10% premium. According to Orcel, the bank is 'overvalued' following a doubling of its share price since September 2024 and the closing of a 22% gap relative to sector multiples.
UniCredit is considering a slight adjustment to the offer only if acceptance rates are high, with an estimated capital impact of approximately 280 basis points on the CET1 ratio to reach a 50% stake, potentially falling to 200 basis points in the event of full control. The industrial objective is to reduce Commerzbank's cost-to-income ratio from 47% to 40% within two years, with net profit projected at EUR5.1 billion in 2028 and EUR6 billion in 2030, targeting a ROTE of 25%. In contrast, Commerzbank's standalone plan forecasts a EUR4.5 billion profit by 2028 and a 15% ROTE.
According to Citigroup, the operation initially seeks to surpass 30% to gain flexibility without triggering a mandatory takeover bid, though a stake between 35% and 40% would be considered sub-optimal. Mediobanca, which maintains a 'buy' rating on UniCredit with a EUR92 price target, believes Orcel could move on multiple fronts: integration with Commerzbank would strengthen the group for future consolidation, generating up to EUR10.5 billion in cash out of EUR21 billion in estimated earnings.
The timeline remains extended: at least one year for regulatory approvals, with a merger unlikely before 2029. Meanwhile, UniCredit continues to monitor the Italian banking landscape, where it holds a 9.9% market share and sees further growth opportunities.
By Antonio Di Giorgio, Alliance News reporter
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