Commerzbank’s Battle Plan: A €6 Billion Profit Target and a Dividend Hike to Thwart UniCredit

The stage is set for a dramatic showdown in Wiesbaden. When Commerzbank shareholders gather at the RheinMain CongressCenter on May 20, the agenda will stretch far beyond routine business. At the heart of the meeting lies a high-stakes defence against UniCredit’s hostile takeover bid, with management pulling out all the stops to keep the Frankfurt-based lender independent.

A Dividend Sweetener to Win Over Investors

To rally shareholder support, the board has proposed a hefty increase in the dividend for the past financial year, lifting it to €1.10 per share from 65 cents a year earlier. Investors wanting to qualify for the payout must hold the stock before the annual general meeting, with the ex-dividend date set for May 21.

Alongside the dividend, management is seeking approval for a new share buyback programme of up to 10% of the company’s share capital. Combined with existing repurchase schemes, the bank aims to return roughly €2.7 billion to shareholders in total — a clear attempt to keep investors onside as the takeover battle intensifies.

A 2030 Roadmap That Puts Milan on Notice

Commerzbank’s counter-offensive goes well beyond short-term payouts. Chief executive Bettina Orlopp has unveiled an ambitious standalone strategy targeting a net profit of around €6 billion by 2030, with revenues climbing to nearly €17 billion. The plan involves cutting 3,000 full-time positions — about 8% of the current workforce — at a restructuring cost of €450 million. Artificial intelligence will play a key role in streamlining internal processes.

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The bank’s management argues that UniCredit’s offer, valued at roughly €31 per share, significantly undervalues the business. Analysts at RBC have backed the defence, maintaining an “Outperform” rating with a price target of €43, calling the capital efficiency plan “very ambitious.”

Political Backing and a Tight Timeline

Berlin has thrown its weight behind Commerzbank’s resistance. Chancellor Friedrich Merz has publicly opposed the hostile approach, and the German government, which still holds a 12% stake, is reportedly considering increasing its position. The political support adds a layer of complexity for UniCredit, which has already secured nearly a third of Commerzbank’s shares.

The Italian lender published its formal offer document in early May, targeting all outstanding shares. The regular acceptance period runs until mid-June, with an extended deadline expected to close on July 3. However, regulatory hurdles mean a final completion is not anticipated until 2027.

Market Signals and Investor Speculation

The stock market is already pricing in a rejection of UniCredit’s terms. Commerzbank shares closed at €35.85 on Friday, well above the bid price, and have gained nearly 48% over the past year. The relative strength index has surged above 90, indicating an extremely overbought condition, while volatility remains elevated at over 45%.

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Investors appear to be betting that UniCredit will be forced to improve its offer. A key sticking point is the potential impact on jobs: Commerzbank’s own restructuring plan envisions 3,000 job cuts by 2030, but it estimates that a takeover by UniCredit could lead to around 7,000 redundancies in Germany.

Next week, Commerzbank’s management will publish its formal, legally required opinion on the bid, which is expected to set the tone for the annual general meeting. With the clock ticking and both sides digging in, the battle for control of one of Germany’s largest private banks is far from over.

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