According to Reuters, the ECB appears likely to give the green light to UniCredit's acquisition of Commerzbank, based on an internal document that was shown to its Supervisory Board last month.
The Italian bank is awaiting regulatory clearance to acquire roughly 18% of Commerzbank's shares that were tendered in its earlier takeover bid. This would raise UniCredit's total ownership to just below half, likely granting it a voting majority at shareholder gatherings.
When evaluating whether an investor is suitable to own over 30% of a bank, regulators usually consider factors such as reputation and financial soundness. Given that UniCredit is among Europe's biggest lenders and has been under ECB supervision for over ten years, the regulator is unlikely to object.
The ECB has repeatedly expressed support for cross-border bank mergers in Europe, and it already gave the go-ahead for UniCredit to acquire a stake of nearly 30% in Commerzbank.
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In late July, UniCredit's takeover passed a key milestone when Germany's Bafin confirmed that its application was complete and passed the case to the ECB for a final ruling, according to sources. This triggered a 60-working-day deadline for the ECB to finish its review.
UniCredit anticipates that the ECB, which oversees both institutions, will soon determine that it has effective control over Commerzbank. Such a ruling would cause the ECB to consolidate Commerzbank's assets onto UniCredit's balance sheet, likely reducing its capital ratios.
According to Bloomberg News, the two banks held their first official discussions this month about handling the anticipated shift in control.
Spokespeople for the ECB, UniCredit, and Commerzbank all declined to comment.
UniCredit already holds a stake of just under 30% in Commerzbank, and the additional 18% from the tender offer would bring its total to just below half. This would give it effective control without a full merger, a structure that could serve as a template for future cross-border deals in Europe. The deal is being closely watched by other European banks, which see it as a potential blueprint for consolidation in a fragmented market.
The potential combination of these two lenders has been watched closely across Europe for years. Both banks are pillars of their home economies, and a merger would create one of the region's largest financial institutions. For European policymakers, the deal is seen as a test case for whether consolidation can help banks compete with larger American and Asian rivals.
The bottom line: This deal is about more than two bank logos merging. It is a test of whether Europe can build bigger, stronger banks that can compete on the global stage. When regulators signal they are on board with a deal this size, it usually gets done. That means the banking landscape in Europe is about to look different, and the ripple effects will reach far beyond Frankfurt.
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