(The Turkish Post) – The European Central Bank (ECB) has authorized Italy’s UniCredit to raise its stake in Germany’s Commerzbank above 30% with no upper limit, clearing the way for the Milan-based lender to take control of the German bank, UniCredit said on Oct. 15.
UniCredit said it expects the remaining regulatory procedures and offer conditions to be completed toward the end of the year. It will then hold about 50% of Commerzbank’s voting rights and be able to take control of the bank, which the German government has tried to keep independent.
ECB clears UniCredit to pass 30% threshold
The Italian lender described the ECB decision as an important milestone in its acquisition of Commerzbank. The bank said the approval reflected the ECB’s positive assessment of the transaction and confidence in UniCredit’s fundamentals and its position in the European banking sector.
The decision allows the bank to convert the Commerzbank shares tendered to it in an exchange offer earlier this year into its own holding. Once the remaining steps are completed, its stake will rise from just under 30% to almost 50%. It can also buy more Commerzbank shares on the market.
Germany’s financial regulator, BaFin, confirmed at the end of July that UniCredit’s application was complete and passed it to the ECB, which had 60 working days to reach a decision.
The ECB’s banking supervision arm oversees the largest lenders in the euro area and has repeatedly said it favors cross-border bank mergers as a way to strengthen the European single market.
Exchange offer for Commerzbank shares
UniCredit announced its offer for Commerzbank on March 16, proposing 0.485 new UniCredit shares for each Commerzbank share. UniCredit said the ratio implied a price of 30.80 euros per Commerzbank share, a 4% premium to the closing price on March 13.
When the offer document was published on May 5, Commerzbank said the implied price of about 31.07 euros was 8.7% below its own closing share price of 34.02 euros the previous day.
At the time, the bank said the offer was designed to take it past the 30% threshold that triggers a mandatory bid under German takeover law, without gaining control. It then held a direct stake of about 26% in Commerzbank and about 4% more through total return swaps.
The Commerzbank management board advised shareholders not to accept, saying the offer did not include an adequate premium. The German government also rejected the offer.
By the end of the additional acceptance period on July 3, shares representing 17.6% of Commerzbank had been tendered, Commerzbank said. It said fewer than 2% of the shares tendered came from institutional and retail investors, and that most came from banks and parties connected to UniCredit. The transfer of those shares and their voting rights was subject to regulatory approvals, including the ECB decision announced on Oct. 15.
Berlin opposes takeover of Commerzbank
The Italian bank, led by Chief Executive Andrea Orcel, moved on Commerzbank in September 2024. That month, Germany’s federal finance agency sold a block of 4.49% of Commerzbank’s shares, and the whole block went to the Milan lender, which added it to a holding it had built partly through derivatives. It has kept increasing its stake since then despite opposition from Commerzbank and from Berlin. The Milan-based group already operates in Germany through HypoVereinsbank (HVB), the Munich-based lender it acquired in 2005.
The German state had held shares in Commerzbank since rescuing the bank during the 2008 financial crisis, and the 2024 sale reduced its holding to about 12%.
The German government is Commerzbank’s second-largest shareholder, with a stake of more than 12%. Berlin wants Commerzbank to remain a listed company headquartered in Frankfurt, to keep its strong business with small and medium-sized companies and to avoid compulsory layoffs.
In late July, Commerzbank Chief Executive Bettina Orlopp called for constructive talks with UniCredit, and the two banks are now in talks about a possible combination.
