Italian lender UniCredit has increased its equity stake in Commerzbank to 20% by converting derivatives into stock.  

The move positions UniCredit as the largest shareholder of Commerzbank, surpassing the German government, which opposes a takeover.  

UniCredit aims to eventually convert its remaining “synthetic position” to boost its equity holding to about 29%. 

According to Bloomberg, the decision is expected to intensify the standoff between UniCredit, led by CEO Andrea Orcel, and Berlin, which supports Commerzbank’s efforts to remain independent.  

Orcel has indicated he may wait until 2027 before deciding on a full takeover offer, following a rally in the stock that made a potential deal more costly. 

Commerzbank has been working to enhance profitability and return money to shareholders to defend itself.  

“Once again, this step has not been agreed with Commerzbank,” Commerzbank was quoted by the publication as saying. 

“The adjustment of UniCredit’s position has no impact on our strategic direction or our ambitions.” 

The bank stated that the change in UniCredit’s stake will not impact its plans.  

Commerzbank’s takeover would enable Orcel to create a new banking giant in Germany by merging it with UniCredit’s German lender HVB. 

Such a move would also facilitate UniCredit’s growth in Poland, where Commerzbank owns mBank.  

However, Orcel’s plan has faced opposition from Berlin, which claimed it was unaware of his intentions when it initially sold a stake in Commerzbank to UniCredit in September. 

Orcel has refuted allegations of deception, stating that UniCredit was invited to purchase the stake sold by the Finance Ministry.  

The Italian suitor subsequently increased its stake through derivatives.  

The recent conversion of some derivatives into shares followed regulatory approval from the European Central Bank, German antitrust authorities, and the US Federal Reserve. 

In a letter dated 18 June addressed to German officials, including Finance Minister Lars Klingbeil and Chancellor Friedrich Merz, Orcel reiterated his push for a deal that he claims would create a European banking champion.  

Klingbeil responded by urging Orcel to direct any proposals to Commerzbank’s management and reaffirmed the government’s support for the bank’s independence, emphasising it should not be the target of an unfriendly takeover. 

UniCredit is also pursuing domestic competitor Banco BPM, where the Italian government has imposed stringent conditions on a potential takeover.