Jornal Do Brasilia - UniCredit says receives ECB green light for Commerzbank takeover

By acquiring Commerzbank, valued at 35 billion euros ($39 billion), UniCredit plans to cement its status as a European heavyweight.

The deal -- long contested by Commerzbank -- should enable UniCredit to merge Commerzbank with its German subsidiary HypoVereinsbank, acquired in 2005.

UniCredit said it had received the authorization from the ECB to "cross the 30% equity participation threshold in Commerzbank AG... and to increase its stake further without upper limits".

"The decision represents an important milestone in UniCredit’s acquisition of Commerzbank, underscoring the ECB's positive assessment of the transaction and the confidence in UniCredit's solid fundamentals and strong standing within the European banking sector," it said.

The final regulatory steps are expected around year-end, by when "UniCredit will have approximately 50% of Commerzbank's voting rights and be able to take control of the bank," it said.

UniCredit is notably proposing to make cuts in Commerzbank’s international network, deemed too complex and inefficient, and to refocus the bank on its activities in Germany.

Commerzbank declined to comment when contacted by AFP.

European officials have been multiplying calls for greater integration in the banking sector, arguing that the persistent fragmentation of the European Union is hampering the continent’s competitiveness.

- 'Vital role' -

In a surprise move in September 2024, UniCredit took a stake in Commerzbank and thereafter built up a stake of nearly 50 percent, despite fierce resistance from the German lender and Berlin, with the German state still owning 12 percent of the capital.

Commerzbank slashed thousands of jobs and hiked its financial targets in an effort to convince shareholders to back its campaign to remain independent.

But these efforts failed and, with UniCredit closing in on a controlling stake, Commerzbank's CEO Bettina Orlopp called in late July for "constructive" talks with the Italian lender.

Berlin has, for its part, asked the head of the Italian bank, Andrea Orcel, to preserve the role of Germany’s second-largest private bank in the country’s economy.

Last month, German Finance Minister Lars Klingbeil met with Orcel seeking guarantees over the bank's future. He said it was of "paramount importance" that Commerzbank "continue to fulfil its vital role in financing the German economy".

UniCredit wants to create a European banking behemoth better able to take on bigger US rivals, arguing that a merger would strengthen the region's fragmented banking sector.

That is why despite resistance in Germany, some policymakers in Brussels and at the European Central Bank have been more supportive of the possible takeover.

P. Duarte--JDB