UniCredit wants to buy Commerzbank for 37 billion euros ($43 billion). The market thinks Commerzbank is worth more than that on its own.
So does Commerzbank. The German bank made its stance official Monday with a 137-page response telling shareholders to walk away from the deal.
The offer from Italy's UniCredit values Commerzbank shares at 34.56 euros each. That's lower than where the stock has been trading.
Commerzbank closed at 36.48 euros last Thursday. So UniCredit is offering shareholders less than they could get by selling on the open market.
"UniCredit's takeover offer does not offer an adequate premium to our shareholders," said Commerzbank CEO Bettina Orlopp.
She added that "what is described as a combination is in fact a restructuring proposal that would massively impact our proven and profitable business model."
The board called the offer "vague and entails considerable risks." In plain English, the bank does not trust how this would actually play out.
A premium is the extra money a buyer offers above market price to win a deal. UniCredit didn't offer one, and that's the core problem.
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UniCredit started buying Commerzbank stock in 2024 and quietly built its stake to around 30%. That makes it the German lender's largest shareholder.
UniCredit CEO Andrea Orcel has argued for over a year that Commerzbank isn't living up to its potential.
Last month he said the bank's "current trajectory will put at risk its survival in the medium term."
Commerzbank's counter is its "Momentum 2030" plan. It pitches that the bank can grow profits faster on its own than as part of a UniCredit deal that would gut its business model.
The standoff has run 19 months and heads to Commerzbank's annual shareholder meeting on Wednesday.
European bank deals across borders are rare for a reason. They are hard to pull off and harder to execute well.
The German government still owns roughly 12% of Commerzbank, a leftover stake from the 2009 bailout during the financial crisis. Berlin has signaled it does not want a foreign bank taking control of one of the country's biggest lenders.
Some officials are reportedly weighing whether to use state bank KfW to lift that stake even higher. That would give Commerzbank a political shield UniCredit can't easily move around.
The real vote isn't at the shareholder meeting. It's the response to UniCredit's exchange offer itself.
Each shareholder decides if they want UniCredit stock instead of Commerzbank stock at the offer's terms.
If UniCredit doesn't get enough acceptances, it can sweeten the deal or walk away. Letting it sit is the option that would burn the most time and trust.
This deal is now a test of whether the new push for European banking deals actually has legs.
The market already gave its answer. The shareholders get theirs next.
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