Is Now the Time to Bet on Commerzbank Amid UniCredit's Stake Build-Up?

The stakes are high in Germany’s banking sector. Italian giant UniCredit has quietly amassed a 28–29.9% stake in Commerzbank through derivatives—stopping just short of the 30% threshold that would trigger a mandatory takeover bid under German law. For investors, this creates a unique opportunity to capitalize on regulatory patience, political theater, and an undervalued asset. Here’s why now could be the moment to take a position in Commerzbank.

The Regulatory Tightrope: Why 30% Matters

Germany’s WpÜG law mandates a mandatory bid for any stake exceeding 30% of voting rights—a rule UniCredit has studiously avoided. Its current 29.9% position, built via derivatives, keeps it compliant while allowing influence over Commerzbank’s strategy. The German government, however, has labeled the move “hostile,” with Chancellor Friedrich Merz stating a breach of 30% is “not foreseeable” in the near term.

This regulatory limbo creates a sweet spot for investors: UniCredit’s “financial investment” stance avoids triggering immediate regulatory backlash, while Commerzbank’s shares trade at a 40% discount to book value compared to peers.

Strategic Patience: Timing the Political Cycle

UniCredit has delayed a full takeover until 2026–2027, citing the need for antitrust clearances and political stability. This delay aligns with Germany’s 2025 federal elections, after which a new government could soften its stance on cross-border banking takeovers. A post-election merger could unlock synergies—UniCredit’s 9.5% direct stake plus Commerzbank’s retail network—while resolving regulatory concerns.

Meanwhile, Commerzbank’s defensive tactics—€1 billion share buybacks, a €0.65 dividend, and 10% workforce cuts—are already boosting shareholder value. These moves, combined with UniCredit’s restrained stake-building, could create a “wait-and-buy” scenario for investors.

Valuation Upside: A Discounted Asset with Catalysts

Commerzbank trades at a 0.4x P/B ratio, far below peers like Deutsche Bank (DBKG:GR) at 0.6x and Santander (SAN:MCE) at 0.9x. This undervaluation reflects fears of a hostile takeover, but it also sets the stage for a snap-back rally if merger talks materialize.

Even without a deal, Commerzbank’s €4.5 billion capital buffer and 2.3% net interest margin—both above regional averages—suggest operational resilience. A resolution of the UniCredit saga, whether through a merger or abandonment, could unlock this discount.

Risks, But Asymmetric Reward Potential

The risks are clear: Germany’s Federal Cartel Office could tighten thresholds, or UniCredit might accelerate its stake-building. A political backlash—such as nationalization proposals floated by opposition parties—could also destabilize the sector.

Yet the rewards outweigh these risks. A €30 price target (up from current ~€1.20) is achievable if:
1. UniCredit’s stake stays below 30%, avoiding a mandatory bid.
2. Merger talks post-2026 elections unlock synergies.
3. Commerzbank’s buybacks and dividends reduce dilution.

Conclusion: Act Now, Wait for the Catalyst

Commerzbank’s shares offer a high-reward, low-regret entry. The regulatory threshold acts as a safety net, while political and operational catalysts create an asymmetric upside. Investors should buy now, using the €1.00–€1.50 range as a strategic entry point.

The next 12–18 months will test whether UniCredit’s patience pays off—or whether Commerzbank’s defenses hold. Either way, the discount won’t last forever.

Jeanna Smialek is a financial analyst specializing in European equities. Her insights focus on regulatory dynamics and valuation anomalies.