Italy's UniCredit wins ECB approval to control Germany's Commerzbank

UniCredit Gains ECB Approval to Take Control of Germany’s Commerzbank

ECB Approval and UniCredit’s Takeover of Commerzbank

By Valentina Za

ECB Authorization and Takeover Details

MILAN, Oct 15 (Reuters) - UniCredit, Italy's second-largest bank, said on Thursday that the European Central Bank had authorised it to take control of Commerzbank, after a hostile takeover offer completed in July lifted its stake in the German rival to 48%.

UniCredit needed ECB approval to take delivery of the Commerzbank shares tendered in the €45 billion offer and advance plans for what would be Europe's biggest cross-border banking deal since the global financial crisis.

Ownership Threshold and Regulatory Processes

UniCredit said the ECB had authorised it to cross the 30% ownership threshold in Commerzbank and "to increase its stake further without upper limits."

It added it expected to be able to take control of Commerzbank by the end of the year with around 50% of voting rights, after completing the "remaining regulatory processes and conditions" relating to its takeover bid.

Background and Strategic Moves

UniCredit’s History in Germany

The Italian bank, which has operated Bavarian lender HVB in Germany since 2005, started investing in Commerzbank more than two years ago, as UniCredit CEO Andrea Orcel embarked on a takeover that several of his predecessors had also studied.

Opposition and Shareholder Control

Despite stiff opposition from Commerzbank and criticism from the German government, UniCredit secured enough shares to control ordinary shareholder resolutions while remaining below the 50% threshold that would force it to buy out minority investors in the German lender's Polish unit mBank.

Future Strategy and Merger Timeline

Orcel has told Commerzbank to adopt the strategy he has mapped out to boost profits at the Frankfurt-based bank from January, while pushing back a full merger to 2029-2030.

Government Talks and Next Steps

Discussions with German Government

The veteran dealmaker has held talks with German government representatives who want Commerzbank to retain its Frankfurt headquarters, to protect jobs and to lend to German businesses.

Shareholder Vote and Management Changes

Once in possession of the shares, Orcel has threatened to call a shareholder vote and install a new supervisory board and management at Commerzbank, without waiting for its annual general meeting next year. 

(Reporting by Valentina Za; Editing by Alexander Smith and Susan Fenton)