Heraldo de Madrid - UniCredit gets ECB nod for Commerzbank stake

Commerzbank has vowed to fight any takeover and UniCredit's approach has angered German politicians, including outgoing Chancellor Olaf Scholz and his likely successor, Friedrich Merz, whose conservatives won elections last month.

UniCredit, Italy's second largest bank, said Friday it was "awaiting the opportunity to initiate a constructive dialogue with the new German government once formed".

It added that this and other factors meant that it would take longer than expected to make a decision on a takeover, with the timeline "now likely to extend well beyond the end of 2025".

The UniCredit-Commerzbank saga began in September when the Italian lender revealed it had built up a stake in its rival, triggering talk that chief executive Andrea Orcel wanted to push for an ambitious pan-European banking merger.

UniCredit has since boosted its holding in Germany's second-biggest bank to around 28 percent.

Commerzbank said the ECB's green light Friday "does not change the fundamental situation: UniCredit continues to be a shareholder of Commerzbank".

"We are convinced of our strategy, which aims for profitable growth and value increase, and we are focusing on its successful implementation," it said.

- Still many factors -

Last month, Commerzbank announced it planned to cut about 3,900 jobs -- around 10 percent of its workforce -- and hiked its financial targets, in a bid to boost attractiveness for shareholders and bolster defences against its Italian suitor.

The job cuts, to be implemented by 2028, come after the lender booked a record profit in 2024.

UniCredit on Friday welcomed "some positive change at Commerzbank, which, together with the recent more optimistic view on German macro (economy), has driven a substantial increase in the bank share price".

"However, only significant time will reveal if the plan is executable and hence determine whether such price appreciation is justified and sustainable," it said.

UniCredit said the ECB authorisation underscored its own "financial strength and regulatory compliance" but said there were "still many factors" that will determine its plans on Commerzbank.

"Several further approvals are still required before the around 18.5 percent shares held through derivatives can be converted into physical shares, including from the Germany Federal Cartel Office," it said.

Orcel said in January he would not rush a takeover, and was willing to walk away, but would wait until the outcome of Germany's elections.

Berlin still holds a 12-percent stake in the lender, the legacy of a government bailout during the 2008 global financial crisis.

Merz, who is in talks to form a coalition government after the February vote, described a possible bid for Commerzbank as "hostile" in an interview with The Economist magazine last month.

However, some EU policymakers have backed the idea of a tie-up, saying it would create a heavyweight better able to compete internationally.

N.Carrasco--HdM