German Chancellor Friedrich Merz and Commerzbank have criticized UniCredit’s €35 billion bid to take over the Frankfurt-based bank, describing the Italian lender’s approach as hostile and aggressive. The dispute highlights ongoing political and strategic tensions surrounding cross-border banking mergers in Europe.

UniCredit’s chief executive, Andrea Orcel, unveiled a business plan for Commerzbank, claiming the German bank had consistently underperformed and that UniCredit’s strategy could boost Commerzbank’s net income to approximately €5.1 billion by 2028—significantly surpassing current projections. Orcel emphasized the need for a stronger, more competitive institution in Germany and Europe amid a rapidly evolving banking environment, suggesting that Commerzbank focus on its core markets in Germany and Poland while streamlining other international operations.

However, Commerzbank has firmly rejected UniCredit’s proposal, labeling it a speculative attempt to dismantle its existing business model rather than a credible value-creation plan. The Frankfurt-based lender accused UniCredit of using misleading characterizations that undermine trust essential to the banking sector and its stakeholders. UniCredit, which has become Commerzbank’s largest shareholder since 2024, has faced resistance from the German government and other parties wary of ceding control to a foreign bank.

Chancellor Merz, speaking at a German banking association event in Berlin, underscored the government’s support for larger European banks but cautioned against endorsing all types of takeovers. Without explicitly naming UniCredit, Merz warned against aggressive tactics, stating that current developments in banking mergers must not disregard Germany’s interests and the fundamental principles guiding such transactions.

The conflict marks a deterioration in relations following UniCredit’s formal offer last month, which Commerzbank rejected. The Italian bank indicated it is open to revising its offer after further discussions, while maintaining that a merger could generate substantial cost synergies, particularly beyond Germany’s borders in other parts of Europe.

Labour union Verdi, represented on Commerzbank’s supervisory board, supported maintaining a strong and independent Commerzbank focused on sustainable operations and safeguarding employment. The union voiced concerns over potential job losses, noting UniCredit’s projection of up to 7,000 job cuts should the merger proceed.

The dispute underscores the broader challenges facing European efforts to consolidate banking sectors across national lines, as regulators, governments, investors, and employees balance competitiveness with economic and political considerations.