Economy
German government officially rejects UniCredit’s offer for Commerzbank
Germany on Tuesday formally rejected UniCredit’s offer for Commerzbank shares, citing a low price and concerns about what it called the Italian lender’s aggressive approach.
UniCredit’s initial offer period for Commerzbank shares is winding down, with both banks digging in their heels in the months-long battle for control of one of Germany’s most important lenders.
On Monday, the Italian bank hailed the fact that it had exceeded the 30% threshold it had set for this takeover bid. The Milan-based lender launched its bid, valued at 35 billion euros ($40.6 billion), in early May to gain control of its German rival and cement its status as a European heavyweight.
The German government holds a 12% stake in Commerzbank acquired in the wake of the 2008 global financial crisis and has long objected to UniCredit’s campaign for a tie-up.
“Accepting the offer was already not an option from a financial point of view, as it does not include an appropriate premium on the current share price of Commerzbank’s shares,” the country’s finance agency said on Tuesday.
Despite Berlin’s position, UniCredit could still win control of the German bank, but the government’s stake gives it seats on Commerzbank’s supervisory board, which appoints management and helps oversee its strategy.
Financial Market Stabilization Fund, which manages the government’s holdings, also said that it supported Commerzbank’s independence, and noted that the bank played a critical role in financing medium-sized Mittelstand companies and was an integral player in Frankfurt, the nation’s financial hub.
“Both must continue to be ensured in the future,” it said.
Separately, Frankfurt prosecutors on Tuesday confirmed that they had begun a preliminary investigation into “possible market manipulation” related to the offer, without providing details.
It follows a criminal complaint filed by Commerzbank’s workers’ council that reached prosecutors on Sunday. The employee group had communicated to staff that they would file the complaint against unspecified persons amid questions about UniCredit’s acquisition of Commerzbank shares at a below-market rate.
UniCredit said in a statement that it was aware of the matter and that the prosecutors’ response was “in line with protocol when such complaints are filed.”
In Tuesday’s trading, Commerzbank shares slipped below the price implied by UniCredit’s buyout offer, after trading consistently above that level since the bid was launched and rendering Italian bank’s offer relatively unattractive.
Shares in Commerzbank were trading at 36.53 euros by 0812 GMT, while those of UniCredit were at 76.97 euros. With an exchange ratio of 0.485 new UniCredit shares for each Commerzbank share tendered, the Italian bank’s bid values Commerzbank at 37.33 euros a share.
The offer ends on Tuesday but will extend for a further 15 days from June 20.
If the offer succeeds and is approved by the European Central Bank (ECB), it should mainly allow UniCredit to gradually increase its stake in Commerzbank and merge it with its German subsidiary HypoVereinsbank.
In particular, the Milan-based bank is proposing to cut back Commerzbank’s international network, deemed too complex and inefficient, and refocus the bank on its activities in Germany.
Chancellor Friedrich Merz said in May the bid was destroying “trust” in Germany’s second-largest private bank.
Seeking to fend off the advances, Commerzbank’s CEO Bettina Orlopp unveiled a strategic plan to strengthen profitability through 2030, including job cuts to become leaner and more attractive to shareholders.
UniCredit has meanwhile asserted that by surpassing the 30% threshold of voting rights, it should be allowed to appoint all of the shareholder representatives to the supervisory board, where two representatives of the German state currently sit.
Orlopp has contested that position, pointing to an agreement with Berlin that guarantees Commerzbank the power to propose the state’s representatives to the board.
Housing prices in Türkiye extended their decline in real terms in May, despite continued growth in sales volumes, as elevated borrowing costs weigh on the property market.
Data from the Central Bank of the Republic of Türkiye (CBRT) showed on Tuesday that the Residential Property Price Index (RPPI) rose 1.7% month-over-month in May and was up 24.5% from a year earlier in nominal terms. The annual nominal increase was the weakest since May 2020.
Adjusted for inflation, however, house prices fell 6.1% year-over-year, marking the 27th monthly real decline in the past 28 months.
Inflation in Türkiye edged up to 32.6% in May from 32.4% in April.
Analysts said the divergence between stronger sales volumes and weaker real prices reflected a market driven more by deferred demand than fresh speculative interest.
“Under normal circumstances, the recovery in transaction volumes would be expected to feed more strongly into prices. The acceleration in real declines was therefore somewhat surprising,” said Ali Hepşen, a professor at Istanbul University’s Faculty of Business Administration.
He said many buyers who postponed purchases in 2023 and 2024 had returned to the market, boosting sales without generating the same degree of upward pressure on prices.
Latest data showed nationwide house sales rose 2.6% from a year ago in April, while the four-month figure jumped 0.5%.
After recording a 1.4% annual real increase in January 2024, house prices slipped back into negative territory in February of that year and have remained below inflation ever since, with the exception of a marginal 0.3% real increase in November 2025.
The pace of real declines has accelerated in recent months, widening from 1.4% in December to 6.1% in May. The annual real decrease stood at 2.3% in January, 3.9% in February, 3.4% in March and 4.3% in April.
“High interest rates remain the main factor limiting prices,” Hepşen said. “Mortgage costs are still elevated, meaning cash buyers continue to dominate the market. This leads to more controlled price movements.”
He added that the current trend also represented a rebalancing after the sharp increases seen in previous years, when house prices had significantly outpaced inflation.
“Prices are increasing in nominal terms, but because the overall price level is rising more quickly, the decline continues in real terms.”
Last week, Türkiye’s central bank left its key interest rate at 37%, as expected, holding steady for a third consecutive meeting, as it monitors the inflation impact of the Iran war.
Since the conflict started at the end of February, the CBRT has halted an easing cycle that began in late 2024.
In its quarterly inflation report in May, the bank raised its end-2026 interim inflation target to 24% from 16%. It sees it falling to 15% in 2027 and to 9% by the end of 2028.
Hepşen said he did not expect a return to strong double-digit real price gains unless mortgage rates declined materially.
How long the decline in real housing prices will continue depends largely on the inflation and interest rate outlook, he added.
Under current conditions, Hepşen said it is likely that house prices will continue to underperform inflation at least until the end of 2026.
“Because today, credit demand, the main factor that would push housing prices higher, is still not strong enough,” he noted.
“We foresee that without a lasting decline in interest rates, the return to real price increases will remain limited.”
Real estate economist Ahmet Büyükduman said house prices and real interest rates historically moved in opposite directions.
“They (house prices and real interest rates) resemble two ends of a seesaw,” Büyükduman said. “When real interest rates rise, housing prices remain below inflation and decline in real terms.”
As long as the current monetary policy stance and high real interest rates remain in place, he said house price increases are likely to stay below inflation.
“I think the increase in housing prices will remain below inflation over the next year as well,” Büyükduman added.
Hyundai said on Tuesday it would strengthen its investment in the production of its upcoming IONIQ 3 electric vehicle in Türkiye with a new battery assembly facility.
The mass production of the IONIQ 3, which is expected to begin in August, will mark the South Korean carmaker’s first EV production in Europe.
It will also make it the first foreign automaker to manufacture battery-powered cars in Türkiye.
The company has allocated 55 million euros ($63.81 million) of its total 715 million euro investment package to the battery plant, Hyundai Motor Türkiye said in a statement.
The facility will assemble battery packs using automated systems in cooperation with Hyundai Mobis.
The investment is expected to create more than 300 jobs in its initial phase and contribute to the development of expertise needed by Türkiye’s electric vehicle sector, the statement read.
The company said it expects IONIQ 3 output to reach 27,000 units this year and exceed 40,000 vehicles in 2027.
The battery factory, built on a 30,000-square-meter (nearly 98,500-foot) site, will house 27 robots and feature automated packaging processes designed to minimize manual handling in production.
Nickel manganese cobalt (NMC) battery cells will be sourced from Hungary, while lithium iron phosphate (LFP) battery packs for shorter-range variants will be supplied entirely from China.
Hyundai will become the second EV producer in Türkiye after homegrown brand Togg, and the first among foreign automakers.
Hyundai’s plant in northwestern city of Izmit has an annual production capacity of 245,000 vehicles and currently produces the i20 and Bayon models.
IONIQ 3 is scheduled to roll off production lines in August before going on sale in the domestic market in September with two battery and powertrain options.
Hyundai Motor Türkiye’s Sales, Marketing and After-Sales General Manager Murat Berkel called the new battery investment a “source of great pride.”
“This investment, which is highly significant both for our country and for the Turkish automotive industry, will contribute to our brand’s growth in Türkiye,” Berkel noted.
The Izmit facility, which is also Hyundai’s first overseas manufacturing plant, has produced 3.3 million vehicles since operations began in 1997.
Hyundai Motor Group plans to invest $90 billion globally by 2030, launching 21 fully electric and 13 hybrid models.
Germany’s Economy and Energy Minister Katherina Reiche is expected to visit Türkiye later this week for high-level talks on strengthening trade and energy cooperation, according to her ministry on Monday.
“Türkiye is a strategically important partner for Germany,” ministry spokesperson Susanne Ungrad told reporters in Berlin.
“The visit on Thursday and Friday will focus on the German-Turkish economic and energy partnership,” she said.
Reiche is scheduled to attend meetings of the Joint Economic and Trade Commission (JETCO) and the German-Turkish Energy Forum, both long-standing platforms for deepening bilateral ties.
She will also hold direct talks with Turkish ministerial counterparts, accompanied by around 30 business leaders from key economic and energy sectors.
Germany is one of Türkiye’s largest economic partners and remained its top export destination in 2025.
Supported by more than 8,000 companies with German capital that are registered and active in the country, bilateral trade exceeded $52 billion last year.
During German Chancellor Friedrich Merz’s visit to Ankara in October 2025, the two countries announced their joint ambition to increase bilateral trade to over $60 billion in the near future.
Türkiye’s competition watchdog announced on Tuesday that it fined tire manufacturers and distributors a combined TL 3.63 billion (nearly $78.5 million) for price coordination, anti-competitive dealer restrictions and labor market violations.
Brisa received the highest fine at TL 1.02 billion, followed by Goodyear at TL 672 million and Continental at TL 397 million, the Competition Authority (RK) said.
Violations included coordinated pricing among competitors and the exchange of sensitive labor market information among others, the authority said.
Moreover, the authority noted that according to the obligations under the investigation, price lists sent to dealers need to be watermarked, announcements cannot be shared collectively, and dealers would need to have access to a system/interface with their own user accounts.
“The practice of sending announcements with the above-mentioned characteristics collectively to multiple dealers or all dealers must be discontinued. Instead, such announcements must be made individually through an interface/portal where each dealer can access the information using its own username and password, and where transactions between the producer/supplier undertakings and dealers are carried out. No verbal or written method other than the relevant interface/portal may be used,” the statement read.
The statement also noted that companies must document that they have implemented these regulations within three months.
Separately, an anti-dumping investigation has been launched into imports of passenger car tires from Czechia, South Korea, Serbia, and Slovakia, as well as cord fabric from China and Vietnam used in their production.
According to the communiqué on preventing unfair competition in imports published in the country’s Official Gazette on Tuesday, following an application by Petlas A.Ş. and Kocaeli Lastik Sanayi A.Ş., supported by Sumitomo Rubber Ako Lastik Sanayi AŞ, it was determined that the alleged dumping of passenger car tires from the Czechia, South Korea, Serbia, and Slovakia caused material damage to the economic indicators of the domestic production sector.
The Board for the Evaluation of Unfair Competition in Imports, the primary trade defense authority in Türkiye, thus decided to open an anti-dumping investigation into the import of these products.
The board also evaluated an application by Kordsa Teknik Tekstil A.Ş. and decided to open an anti-dumping investigation into imports of nylon cord fabric from China and polyester cord fabric from China and Vietnam.
Elon Musk’s SpaceX, fresh off its record-breaking IPO, told U.S. securities regulators on Tuesday that it would acquire Anysphere, the firm behind artificial intelligence coding startup Cursor, at a valuation of $60 billion.
In a filing with the Securities and Exchange Commission (SEC), SpaceX said the all-stock deal was expected to close in the third quarter of this year and that Cursor would become a wholly owned subsidiary.
The two companies had announced a partnership in April that included a clause for Cursor to be potentially bought by SpaceX at the $60 billion figure.
Cursor, founded in 2022 and based in San Francisco, specializes in AI for creating software code, particularly for business uses.
Combining Cursor’s software and product expertise with SpaceX’s “Colossus” AI training supercomputer will enable the company “to build the world’s most useful models,” the companies said in April when announcing their partnership.
The acquisition comes after SpaceX on Friday finally went public, raising a record-breaking $86 billion in its IPO.
A two-day surge in the company’s share price saw SpaceX close trading on Monday at a valuation above $2.5 trillion, placing it among the six largest companies in the world, ahead of Broadcom, Saudi Aramco and Tesla and just behind Amazon.
Co-founded in 2002 by Musk, the world’s first trillionaire, SpaceX has since expanded into a major satellite operator and folded in his artificial intelligence company, xAI, which includes the social media platform X, formerly Twitter.
China’s economy displayed increasing unevenness in May, with retail sales declining for the first time in over three years and investment weakening even as industrial production picked up pace.
Tuesday’s official data highlighted a two-speed growth pattern in the world’s second-largest economy, with factories buoyed by surprisingly resilient exports but domestic demand weakening amid a multiyear property market downturn.
Retail sales, a key gauge of consumption, slid 0.6% in May, data from the National Bureau of Statistics (NBS) showed, reversing April’s 0.2% rise and below the estimated 0.0% in a Reuters poll. It was the first monthly fall since December 2022.
The fragility was evident in the auto sector. A downturn in domestic car sales extended into an eighth consecutive month in May, underscoring softening demand in the world’s largest auto market, where pressure is likely to persist through the rest of the year.
Travelers’ spending during the five-day Labour Day holiday in May was lukewarm, and the impact of the government’s consumer-goods trade-in scheme is fading. A high base from May last year also contributed to the decline.
At a bar in Shanghai’s financial district, manager Jie’ao Feng said his business has taken a hit from shrinking corporate entertainment budgets. He has been offering group deals to draw larger crowds, but this has squeezed margins.
Screening World Cup matches hasn’t helped much, he said, because of the late-night and early-morning scheduling of the matches, and he has had fewer customers in June than in May, when his sales saw a boost from the long holiday.
“Consumers are not as impulsive as before,” Feng said.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, said that the weak retail sales data places pressure on the government to consider policy measures to stabilize consumption.
“I still expect policy ‘fine tuning’ will come in July after the second quarter GDP data is released.”
‘Divides characterized economy in May’
By contrast, industrial output rose 4.5% in May from a year earlier, picking up from 4.1% growth in April and beating expectations of a 4.3% increase.
A surge in global AI investment and related tech demand has helped the world’s biggest manufacturer offset the export hit many had expected from the Iran war. China’s high-tech manufacturing output rose 15.1% in May.
“Several divides characterized the economy in May: the divide between domestic and external demand, the divide between AI and the traditional industries, and the divide between goods retail and services consumption,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
Services consumption grew 5.4% in January-May, much better than goods sales, and is becoming a growing driver of household consumption, but it also slowed from 5.6% in the first four months.
Xu expected economic growth in the second quarter to slow to 4.5% from 5% in the first.
“For full-year 2026, achieving the growth target of 4.5-5% won’t be difficult, but soft domestic demand still warrants policy intervention in the second half.”
Investment slump deepens, property drag persists
Investment data was also much weaker than expected. Fixed-asset investment fell 4.1% in the first five months of 2026, following a 1.6% decline in January-April. Economists had expected a 2% fall.
NBS spokesperson Fu Linghui said the decline was due in part to high temperatures and heavy rain in some regions as well as the transition from old to new growth drivers.
China still has ample room for investment in the future, with new urbanization, rural revitalisation, the development of “new quality productive forces” and improvements in public services all requiring support, Fu added.
Property investment extended its decline in the first five months, dropping 16.2% compared with the same period last year after falling 13.7% in January-to-April. Property sales and new construction also fell more sharply.
On a month-over-month basis, new home prices fell at a slightly faster pace in May, even as larger cities showed tentative signs of stabilization.
Weak household loan data released last week suggested that people remain wary of borrowing to buy homes amid sluggish income growth and job insecurity.
The labor market is still under pressure, with about 12.7 million graduates leaving schools during the summer, while fears of AI displacement are causing worker anxiety. But the nationwide survey-based jobless rate eased to 5.1% from April’s 5.2%.
Economists say strong exports could continue to provide a prop to China’s economic growth this year, but its widening trade surplus may cause some disputes.
“The export boom can help to mitigate the weak domestic demand in the short term. But given the size of China’s economy, strong export growth will likely lead to tension with trading partners,” Zhang from Pinpoint Asset Management said, adding a potential trade conflict with Europe is a risk to watch in the coming months.
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