Under pressure from a hostile takeover bid by Italy’s UniCredit, Commerzbank attempted this week to rally shareholders and employees around its independence at a general meeting that—as the Financial Times notes—may well be its last as an autonomous bank with a 156-year history.
In the city of Wiesbaden, hundreds of small shareholders, employees wearing the bank’s distinctive yellow T-shirts, and fund managers gathered not only to celebrate the stock’s strong rise, but also to defend a historic German banking group that for years had been seen as a symbol of the problems plaguing the European banking system.
Stock rally and “war” with UniCredit
Commerzbank’s stock is now trading at a 15-year high, having risen by approximately 40% over the past year and outperforming the Stoxx Europe 600 Banks index .
About 1,000 shareholders attended the meeting—up from 740 last year—representing nearly 42% of the bank’s share capital.
CEO Bettina Orlop received warm applause as she presented a strategic plan that calls for returning approximately half of the bank’s current market value to shareholders by 2030.
However, the celebrations took place in the shadow of UniCredit, which is now Commerzbank’s largest shareholder and has made a hostile bid worth €39 billion. The Italian bank did not participate in the meeting, despite the fact that its stake could have secured it a dominant role in a typical general meeting.
“There’s still an elephant in the room,” remarked Andreas Thomae of Deka Investment, comparing UniCredit’s strategy to “a bull in a china shop.”
The traumatic legacy of Dresdner Bank
Commerzbank was founded in Hamburg in 1870 to finance German foreign trade and grew into one of the country’s largest banks.
However, the acquisition of Dresdner Bank during the 2008 financial crisis proved disastrous, saddling the bank with “toxic” investment banking assets and leading the German government to a €18.2 billion bailout .
Berlin remains Commerzbank’s second-largest shareholder to this day, holding a 12% stake.
Employees and shareholders in favor of independence
The atmosphere at the meeting was strongly in favor of maintaining the bank’s independence. Employee-shareholders wearing yellow hats and T-shirts formed a heart in front of the stage, applauding management, despite the fact that 3,000 new job cuts have already been announced.
“We know that a high share price helps the portfolio, but it also helps us remain independent,” said a bank employee from Düsseldorf, showing a 44% profit on the shares he had purchased himself.
Several small shareholders even accused the German government of making a “mistake” when it sold shares to UniCredit in September 2024, effectively triggering the current crisis.
“Deep cuts” warns Commerzbank
Commerzbank Chairman Jens Weidmann urged shareholders not to accept the share swap proposed by UniCredit, while Orlop warned that a potential takeover could lead to “deep cuts, massive job losses, and a withdrawal from entire business sectors.”
UniCredit’s offer had attracted only 0.02% of Commerzbank’s shares ahead of the meeting. However, investor representatives warned that resistance alone would not be enough.
UniCredit is offering 0.485 of its shares for every Commerzbank share, valuing the German bank at €38.6 billion, an amount lower than Commerzbank’s market capitalization, which stands at approximately €40.9 billion.
“UniCredit will not back down”
Although shareholder response to UniCredit’s proposal has so far been extremely low—just 0.02% of shares—many investors believe the pressure will continue.
Hendrik Schmidt of DWS warned that the expectation of findinga “white knight”to thwart UniCredit is unrealistic.“One thing is clear: UniCredit will not back down. It has the financial resources and the time,” he said.
At the same time, Klaus Nieding of the DSW shareholders’ association noted that “with the 30% threshold crossed, the door to a takeover has now swung wide open,” calling on UniCredit CEO Andrea Orcel to abandon “tactics of gradual infiltration and misinformation” and to continue talks regarding a potential “merger of equals.” UniCredit’s market capitalization is €108 billion.
Orlopp and Orcel held talks earlier this year after UniCredit revealed its offer, but did not reach an agreement. Not all investors are completely dismissing the idea of a deal. “I’d be happy with €70, ” joked a small shareholder, roughly double Commerzbank’s current share price.