UniCredit wins ECB approval for Commerzbank stake | USAEMALL.com

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Italy’s UniCredit has received the go-ahead from the European Central Bank to increase its stake in German rival Commerzbank to up to 29.9 per cent, but said the timeline for deciding on any potential takeover was likely to “extend well beyond the end of 2025”.

The Italian bank, which built a 28 per cent stake in Commerzbank through a combination of share purchases and derivative transactions last year, said on Friday that the ECB would allow it to convert this into a direct shareholding.

Under European rules, investors must seek permission if they want to own more than 9.9 per cent of the shares of the region’s biggest banks. UniCredit is also waiting for approval from the German competition regulator.

If UniCredit’s shareholding goes over the 30 per cent mark, it would need to launch a formal takeover bid under German regulations.

Commerzbank’s share price has risen more than 70 per cent since UniCredit first disclosed its stake in September, but it has consistently said it does not want to be taken over by its Italian rival.

The German bank said on Friday that the ECB approval “does not change the fundamental situation” and that it would continue to focus on its strategy as an independent business.

UniCredit said it would wait for the “opportunity to initiate a constructive dialogue with the new German government once formed”.

The government owns a 12 per cent stake in Commerzbank. Outgoing chancellor Olaf Scholz was against a UniCredit takeover. Chief executive Andrea Orcel previously said he would not move ahead with a bid against the wishes of Berlin.

As UniCredit is an ECB-regulated entity with a strong balance sheet, people familiar with the details said the approval was a formality.

UniCredit last year took the market by surprise by quickly building a substantial stake in Commerzbank through derivatives transactions, with the right to convert them to equity if it secured regulatory approval.

The Italian bank asked the German competition regulator for approval of its stake at the end of last month. People familiar with the matter say the regulator is likely to agree given the low market share of both UniCredit and Commerzbank in Germany.