UniCredit SpA is poised to obtain regulatory permission in the next few days to own as much as 29.9% of Commerzbank AG’s shares, as Chief Executive Officer Andrea Orcel pursues a potential takeover of the German lender.
The European Central Bank is set to give its formal approval by the beginning of next week, according to people familiar with the matter. UniCredit has already built a stake of about 28% in the German lender, mostly through derivatives. It needs regulatory approval to convert those into shares.
Representatives for the ECB, UniCredit and Commerzbank declined to comment.
Approval would take Orcel one step closer to a potential acquisition of Commerzbank, a prospect that has triggered a backlash among politicians in Berlin. The German company — a key lender to the many small- and medium sized businesses that form the backbone of the country’s economy — has also pushed back, with CEO Bettina Orlopp setting more ambitious profit goals to help ward off any approach.
UniCredit said last month that it was expecting ECB authorization in March. The assessment for a so-called qualifying holding in a bank is largely based on the acquirer’s financial strength and reputation. UniCredit is one of the largest banks in Europe and has a capital metric well above its regulatory minimum, making a rejection unlikely, Bloomberg previously reported.
The Italian bank has estimated that converting the derivatives into stock would trim its key capital ratio by 0.3% points. The metric stood at 15.9% at the end of December, unchanged from a year earlier, despite billions of euros it spent on investments and shareholder payouts.
Orcel has said he wants to decide at the end of this year whether he makes a takeover offer for Commerzbank, linking the decision to the next German government’s willingness to let the deal happen. Germany, which still owns about 12% in Commerzbank, will need some time to form a government after snap elections last month.
Orcel is the key player in a series of transactions that are reshaping Italian and European finance more broadly. He has also launched an unsolicited takeover bid for smaller Italian rival Banco BPM SpA to create Italy’s biggest lender, and has bought about 5% in Assicurazioni Generali SpA.
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