Commerzbank says it could enter UniCredit first as a subsidiary

Commerzbank said it is convinced it can create value together with UniCredit. The blueprint points to procurement, technology and sales as the likeliest sources of synergy.

The disclosure came the same week as Commerzbank's third-quarter results, which showed its strongest nine-month profit. Still unknown: whether Brussels clears the deal outright, imposes remedies or opens an in-depth investigation.

A two-step route into UniCredit

Chief executive Bettina Orlopp called the exchange with UniCredit "very constructive" and pointed to substantial value potential, according to Il Giornale. Platow reported stalled talks between Orlopp and UniCredit chief Andrea Orcel.

On 30 October UniCredit publicly committed to financing German mid-sized companies if a combination goes ahead.

The 16 November deadline in Brussels

European Union competition authorities are expected to issue an initial decision by 16 November on the proposed transaction. UniCredit formally requested antitrust clearance from the European Commission, according to a 9 October Reuters report citing a filing with the EU executive arm. The Commission can authorise the transaction outright. It can require commitments to address competition concerns. Or it can open a more extensive investigation.

Reuters reported that the German government retains a 13.3% stake in Commerzbank and has opposed UniCredit's approach.

Supervisory approval is already in place. The ECB cleared UniCredit's increased Commerzbank stake on 16 October, UniCredit said. That allows UniCredit to raise its holding above 30% and potentially as much as 100%. Once the remaining approvals arrive, UniCredit would control almost 50% of Commerzbank's voting rights, enough for a majority at shareholder meetings. The acquisition of a firm with a value of about EUR 42 billion would rank among the largest banking deals globally in two decades. UniCredit still needs approvals from EU antitrust authorities, the US Federal Reserve and the relevant Polish regulator. The Polish approval is needed because Commerzbank owns mBank in Poland.

Earnings as the bargaining chip

Commerzbank reported third-quarter net profit of EUR 859 million, up 45% year on year. Nine-month net profit reached EUR 2.67 billion, up 41% from the prior-year period. Operating profit came in at EUR 4.04 billion after nine months, a 17% advance.

Management kept its full-year targets: net profit of at least EUR 3.4 billion and revenue of around EUR 13.2 billion. The nine months already booked cover the bulk of that profit goal.

Commerzbank cut its net interest income forecast to roughly EUR 8.5 billion from EUR 8.6 billion for 2026, pointing to stiffer competition for deposits.

What a combination would change

Taking control will probably mean the ECB counts Commerzbank as a subsidiary of UniCredit for supervisory purposes. That would lead to higher capital requirements for the Italian bank. Orlopp said accounting consolidation will take place "for the full year 2026 or for the first quarter of 2027".

Orcel has indicated he will seek to replace swathes of Commerzbank's supervisory board and then top management including Orlopp. He is already looking for potential successors, people familiar with the matter said. Orlopp told Bloomberg TV that her contract runs until 2029. She will seek to serve it out as long as she has backing from the supervisory board and agreement on strategy.

What happens next

UniCredit said the remaining regulatory processes and conditions to complete the offer are expected around year-end. Commerzbank expects the takeover offer to close in the coming months.