Commerzbank Staff Protest UniCredit Bid Amid Standalone Strategy

Ahead of Commerzbank’s AGM on Wednesday (May 20), large groups of employees dressed in corporate yellow protested against UniCredit over the proposed takeover deal by the Italian multinational bank.

Last week, Commerzbank formally rejected a takeover approach from UniCredit, escalating a cross-border banking standoff that has been building for several months.

The takeover battle has drawn political scrutiny in Germany, where officials have previously expressed concern over foreign control of one of the country’s most systemically important lenders.

UniCredit chief executive Andrea Orcel has defended the proposed deal, arguing that deeper European banking consolidation is needed to improve competitiveness across the region.

At today’s protest, however, Frederik Werning, union official and Commerzbank supervisory board member, told Reuters that he lacked faith in Orcel.

"We are deeply concerned that if his plans go through, they will not be strategically sound, they will lead to job losses, and they will also threaten German small and medium-sized businesses,” he said.

Germany’s second-largest bank said its management and supervisory boards unanimously recommend shareholders reject UniCredit’s exchange offer, arguing the bid does not adequately reflect Commerzbank’s underlying value or future upside.

Earlier this month, UniCredit launched an unsolicited all-share offer, which valued Commerzbank at almost €39bn ($45bn), which implied a valuation below Commerzbank’s prevailing market price, according to the German bank.

In a statement, Commerzbank said UniCredit had failed to present a “coherent and credible strategic plan” for combining the two institutions, adding that the proposal was “vague and entails considerable risks.”

The bank also argued shareholders would be better served by its standalone “Momentum 2030” strategy, which targets higher profitability and operational improvements over the coming years.

Commerzbank chief executive Dr Bettina Orlopp has positioned independence as the stronger long-term route, despite growing pressure from UniCredit, which has steadily built its stake in the bank and is now Commerzbank’s largest shareholder at 28%, close to the 30% threshold under German takeover rules.