ECB Leans Toward Approving UniCredit's €43B Hostile Bid for Commerzbank

An internal ECB document reported by Reuters on August 12 showed the central bank's banking supervisory arm found 'no grounds to object' to UniCredit's roughly €43 billion hostile takeover of Commerzbank, though it flagged the integration as likely to be 'challenging and long-lasting' and requires the Italian lender to adopt stronger governance and a credible plan to rebuild trust with Commerzbank's management and staff. UniCredit has built an approximately 48% stake in Commerzbank; Germany's BaFin authorized it in late July to exceed the 30% control threshold, triggering a 60-working-day ECB review expected to conclude around September or October. Germany's federal government, which had bitterly opposed the deal as a threat to German banking sovereignty, was reported to be shifting toward seeking a 'gracious exit' from the fight as UniCredit's position became increasingly difficult to block — what would be Europe's largest cross-border bank merger since the 2008 financial crisis.