Andrea Orcel has built a reputation as one of Europe's most creative dealmakers, but his approach to acquiring Commerzbank reveals how sophistication can backfire. Since 2023, UniCredit quietly accumulated a 29 per cent stake using derivatives, much of it purchased below net asset value. This stealth strategy initially gave the Italian bank an advantage over rival bidders.

The exchange offer provides less than half a UniCredit share for each Commerzbank share, creating a discount to market value. Despite this unattractive terms, 12 per cent of shareholders tendered their stock by last week. However, Commerzbank has asked regulators to investigate the deal, noting most support comes from banks already connected to UniCredit through total return swap counterparties.

If successful, UniCredit inherits 40,000 employees and millions of customers while managing German government hostility and regulatory scrutiny. The complex structure avoids the transparency of a straightforward takeover bid that might have commanded broader support. Deutsche Bank stands ready to capitalize on any market share UniCredit cannot consolidate.

A simpler approach in 2024, when UniCredit held 21 per cent, could have secured the prize with a premium offer. Instead, the bank faces potential costs from unpurchased shares and prolonged integration challenges. Sometimes the most elaborate strategy proves the most expensive path to victory.