Commerzbank Rejects UniCredit's Transformation Plan With Combination for Being 'Hostile, Misleading'
UniCredit (UCG.MI) on Monday presented a transformation plan for Commerzbank (CBK.F), outlining potential benefits of their merger, which the German lender dismissed as continued "hostile tactics and misleading characterisation."UniCredit, which holds 26.04% of Commerzbank's voting rights through shares and 3.31% through instruments, pitched a new Unlocked approach to refocus Commerzbank on its core markets of Germany and Poland instead of the lender's "aggressive and riskier" international expansion under its Momentum plan. The suitor said the new approach will prioritize the German Mittelstand and families, raise investments in the frontline, technology and the adoption of artificial intelligence, while targeting efficiencies in non-core international network, senior overheads, operations, and more.Under Unlocked, Commerzbank could reach a net profit of 5.1 billion euros by 2028, above the consensus of 4.5 billion euros under the German bank's Momentum strategy, UniCredit said, adding that Commerzbank is "ill-prepared" to compete with the US and fintech entrants in Germany, while being overly focused on short-term delivery and partly relying on favorable interest-rate conditions and non-core international growth to offset higher-than-target operating expenses in 2025.UniCredit also countered Commerzbank's remarks that its takeover offer provided no adequate premium, arguing that consensus forecasts imply an over 5% stronger performance after a combination compared with the Momentum strategy. It added that Commerzbank has declined further premium discussions and engagement on deal details.Commerzbank rejected those assertions, saying the offer still excludes a "market-standard" premium and describing the transformation proposal as a "speculative attempt to dismantle" its business model following what it called more than 18 months of unsolicited stake-building by UniCredit."What UniCredit described today is not a convincing combination case. It is an attempted restructuring proposal by a direct competitor, cutting into the core value chain of the German Mittelstand regarding its international business and trade finance. It comprises a compression of Commerzbank's cost base modelled on HypoVereinsbank, and a reorientation away from the Mittelstand franchise that defines the Bank's competitive position. At the same time, UniCredit has not revealed any substantive new details on its actual combination plan -- be it actual levers, cost-to-achieve or timeline. This has been repeatedly requested by Commerzbank and been denied to date," Commerzbank argued.The lender added that any potential combination benefits would likely take "a couple of years," with implementation possibly starting between 2029 and 2030, and said it will present updated targets and its 2030 strategy alongside first-quarter results on May 8.