UniCredit Doubles Commerzbank Stake to 20% Amid Merger Talks, German Resistance

Italy's UniCredit has significantly increased its stake in Germany's Commerzbank, converting derivatives to hold around 20% voting rights and aiming for approximately 29% ownership, making it the largest private shareholder. This move follows regulatory approvals but faces strong political and union opposition in Germany, with Chancellor Merz and labor unions expressing concern over potential job losses and national financial control. UniCredit CEO Andrea Orcel has proposed a merger between Commerzbank and UniCredit's German subsidiary HypoVereinsbank (HVB), though this requires broad stakeholder support, and alternatives include holding or selling the stake. The situation highlights ongoing challenges in European cross-border banking consolidation due to regulatory, legal, and political barriers. Market reactions reflect uncertainty, with Commerzbank shares surging on merger speculation while UniCredit's valuation remains lower amid execution risks. The outcome of UniCredit's investment and potential merger could reshape the European banking landscape and signal shifts in economic policy and banking strategies across the region.