Andrea Orcel clears ECB hurdle for Commerzbank takeover

UniCredit chief Andrea Orcel won clearance from the European Central Bank to take control of Commerzbank, the Italian lender said on Friday.

The European Central Bank let UniCredit cross the 30% ownership line in Commerzbank. It also allowed the bank to “increase its stake further without upper limits.”

The decision follows a hostile takeover offer worth €45 billion that closed in July. That bid lifted UniCredit’s holding in its German rival to 48%.

Andrea Orcel eyes control by year-end

UniCredit said it expected to reach control by the end of the year, holding around half of the voting rights. First, it must finish some remaining regulatory steps.

Together, the two lenders could form the biggest cross-border banking tie-up in Europe since the financial crisis. UniCredit already has a foothold in Germany, since it has owned the Bavarian bank HVB since 2005.

Orcel started buying Commerzbank shares more than two years ago. Several of his predecessors had studied the idea but never carried it out. Before this ruling, UniCredit needed the regulator’s approval to take delivery of the shares that investors tendered in its offer.

The veteran dealmaker pressed on despite stiff resistance from Commerzbank and criticism from Berlin. His persistence has now paid off, at least in regulatory terms.

Orcel’s plan for Commerzbank

Andrea Orcel wants Commerzbank to follow the strategy he has drawn up, starting in January, to lift profits at the Frankfurt-based bank. A full merger would wait until 2029 or 2030.

He has also threatened to call a shareholder vote once the shares reach his hands. A new supervisory board and management could follow, he says, without waiting for next year’s annual meeting.

The stake stays short of 50% for now, which spares UniCredit a legal duty to buy out minority holders in Commerzbank’s Polish arm, mBank. Even so, around half of the votes would let it sway key shareholder decisions.

Berlin pushes back

Commerzbank’s management and the German government have opposed the move from the start. Still, UniCredit gathered enough shares to sway ordinary shareholder votes.

Berlin wants guarantees on three points. It asks that Commerzbank keep its Frankfurt headquarters, protect jobs and continue lending to German businesses.

Orcel has held talks with government representatives on those demands. However, no deal has emerged so far.

The decision removes a big barrier to UniCredit’s plan to merge with its German rival. Still, the lender wants to move step by step, with a full merger pushed back by several years. Commerzbank has not welcomed the approach, and the Italian bank has pressed on regardless.

Commerzbank said the regulator’s decision did not change UniCredit’s status as an ordinary shareholder, for the moment.

As a result, the next months will test how far Andrea Orcel can push his plans before the shares change hands.

Investors will watch the German response closely, since politics, jobs and a national lender all sit at the heart of this fight.

Meanwhile, rivals across European banking are following this banking dispute, because a successful deal could encourage similar cross-border bids.