The German government is reportedly exploring drastic measures to counter an unsolicited takeover bid for Commerzbank by Italy’s UniCredit. As UniCredit prepares to acquire the German lender, some officials in Berlin are considering increasing the state’s existing stake in Commerzbank, which is considered a strategic asset. Commerzbank is a significant German lender. It primarily serves as a financier for Mittelstand firms – the small and medium-sized enterprises that form a crucial part of Germany’s economy. Germany already holds a 12% stake in Commerzbank following a bailout during the financial crisis, and increasing this through state bank KfW could create a bloc large enough to hinder a full takeover.
Such a move would face substantial hurdles, notably the need to secure several billion euros amidst Germany’s current financial belt-tightening. However, proponents argue it could be justified by Commerzbank’s vital role in financing the Mittelstand. Armand Zorn, an influential member of the Social Democratic Party, indicated that a KfW stake “should certainly be considered” as a “last resort.” He emphasised the profound impact such a step would have, extending beyond mere symbolism.
Government officials and Commerzbank management have expressed growing exasperation as they struggle to deter UniCredit CEO Andrea Orcel’s persistent cross-border takeover attempt, which he has been pursuing since 2024. Orcel, who formally launched a takeover at a “lowball price,” has built up nearly a 30% stake and argues Commerzbank has not realised its potential. In response, Commerzbank is set to publish an updated strategy this Friday, hoping to convince investors of the value of its independence, with expected announcements of cost cuts and potential staff reductions. The battle has seen Germany’s financial regulator intervene, instructing UniCredit to withdraw critical advertisements, while worker councils and some long-time corporate customers also voice opposition to the deal.
The situation has become a test of the German government’s resolve, with ministers repeatedly warning UniCredit against the takeover. Failure to act could further damage Berlin’s standing amid broader economic challenges.
