Commerzbank AG has formally rejected UniCredit SpA’s €37 billion takeover bid, arguing the offer undervalues the bank and fails to provide shareholders with an adequate premium.

CEO Bettina Orlopp said Monday that the proposal does not sufficiently reflect Commerzbank’s value. While the bank is open to negotiations, it said UniCredit would need to improve its financial terms and provide a more convincing strategy for the combined group.

The German lender criticized UniCredit’s synergy assumptions as unrealistic and warned that the proposed merger could weaken its ability to serve German corporate clients. It also challenged the Italian bank’s estimates for revenue retention, restructuring costs, IT integration, and planned workforce reductions.

UniCredit is offering 0.485 of its shares for each Commerzbank share, valuing the German bank at around €37 billion, below its market capitalization of approximately €39 billion. UniCredit CEO Andrea Orcel has suggested the bid could be raised if investor support increases or discussions advance.

The dispute marks the latest escalation in a takeover saga that began in September 2024 when Orcel openly targeted Commerzbank as part of UniCredit’s push into Germany. A formal offer was submitted in March and will remain open until June 16.

Commerzbank also accused UniCredit of damaging trust through misleading communications and aggressive tactics. The German government, which owns about 12% of Commerzbank, remains strongly opposed to the deal.

UniCredit currently holds nearly 27% of Commerzbank shares directly and controls an additional 12% of voting rights via derivatives. Despite that position, shareholder participation in the offer has so far been limited.

Commerzbank’s annual general meeting is set for May 20.