Italy’s UniCredit has secured just under half of the voting rights in Germany’s Commerzbank following a successful takeover bid, setting the stage for a major realignment of the European banking landscape.

According to a report by German Foreign Policy, the Italian lender is positioned to seize control of both the supervisory and management boards of Germany’s second-largest private bank at the annual general meeting of shareholders in 2027.

In this acquisition campaign, UniCredit has drawn support from an international network of financial institutions, including Japan’s Nomura, France’s BNP Paribas, and several US banks.

The development not only brings a near two-year power struggle between the major German and Italian lenders to a close, but also underscores the broader, ongoing consolidation within the European banking sector.

As UniCredit positions itself as a new European banking group, Germany increasingly finds itself on the defensive.

Commerzbank, a cornerstone of the Frankfurt financial center and a vital source of credit for Germany’s small and medium-sized enterprises (SMEs), is now transitioning to foreign control.

The conflict highlights the deep-seated tension between the integration of the European financial sector and the national interests of individual member states seeking to maintain control over their domestic economic hubs.

UniCredit secures majority voting stake

In early May, UniCredit launched a takeover bid that remained open until early July, offering 0.485 of its own shares for each share of Commerzbank.

Following the expiration of the offer period, UniCredit announced that it had acquired 17.6% of Commerzbank’s shares through the share exchange offer.

This transaction lifted its total holdings in the Frankfurt-based lender from 26.77% to 44.37%, effectively handing UniCredit victory in the two-year battle for control.

When factoring in an additional 3.22% stake that UniCredit holds through derivative instruments, its total shareholding reaches 47.59%.

Because the treasury shares held by Commerzbank do not carry voting rights, UniCredit’s stake translates to 49.65% of the total voting rights, according to the Italian bank’s own data.

In addition, UniCredit holds derivatives representing another 13% of Commerzbank shares, though these instruments do not currently carry voting rights.

At the next annual general meeting scheduled for the spring of 2027, eight of the ten shareholder representatives on the supervisory board will stand for re-election.

Leveraging its majority at the annual meeting, UniCredit will be in a position to decisively influence the allocation of these key seats.

Criticism of the bid and “market manipulation” claims

Since the transaction, allegations of market manipulation in connection with the takeover bid have been raised.

However, the Commerzbank General Works Council, which filed a formal complaint against unidentified individuals, suffered a legal defeat in its challenge.

Commerzbank’s management has also repeatedly criticized UniCredit’s disclosures and brought the matter to the attention of BaFin, Germany’s financial regulatory authority.

According to the regulator, a significant portion of the tendered shares belonged to banks and market participants closely linked to UniCredit.

Commerzbank contends that there is a lack of transparency regarding the volume of borrowed shares that were tendered and the specific hedging agreements that remain in force.

It is established that Nomura of Japan, Citigroup of the US, and BNP Paribas of France conducted swap transactions with UniCredit involving Commerzbank shares.

Alongside these institutions, UniCredit can also rely on other major financial firms, including Jefferies and Bank of America.

These partner banks provide UniCredit with potential access to an additional 13% of Commerzbank shares at a specified time.

German government faces potential removal from bank management

In mid-June, UniCredit threatened to replace Commerzbank’s supervisory and management boards.

To execute such a move, however, the major Italian bank would need to replace the two supervisory board members appointed by the German federal government.

The German government secured the right to appoint two representatives to the supervisory board following its state-funded bailout of Commerzbank.

UniCredit has now stated that, provided it receives “sufficient shareholder support” at the annual general meeting, it will be “in a position to elect all shareholder representatives to the supervisory board.”

If UniCredit successfully replaces Commerzbank’s supervisory and management boards at the 2027 annual meeting, it would represent a direct setback for the federal government.

The move would directly impact supervisory board members whose government-appointed terms run through 2029.

Commerzbank’s critical role in the German economy

For the Frankfurt financial center, these developments present a serious challenge.

Commerzbank is a foundational institution of the German financial sector, maintaining deep-seated ties with Germany’s small and medium-sized enterprises (SMEs).

Should the bank be reduced to a branch of UniCredit, key lending decisions would be routed to Milan instead of being resolved in Frankfurt.

Consequently, the Frankfurt financial hub risks losing influence, decision-making authority, and economic sovereignty.

According to Commerzbank, the institution processes approximately 30% of Germany’s foreign trade. Many of the bank’s employees view this extensive reach as a key competitive advantage.

Commerzbank supports the international commercial activities of a vast number of mid-sized firms that frequently struggle to find suitable, dedicated points of contact within larger international banks.

The “consolidation” trend in the European banking system

While the takeover of Commerzbank has met with widespread resistance in German political circles, it has received strong backing from economists, particularly those from other EU member states.

Monika Schnitzer, head of the German Council of Economic Experts, believes there are sound economic reasons to analyze cross-border mergers rather than rejecting them reflexively.

In her view, the European financial market remains insufficiently integrated. She further argues that German banks are highly inefficient by international standards and are therefore ill-equipped to compete against major global institutions.

As early as 2024, European Central Bank (ECB) President Christine Lagarde of France stated that cross-border banking mergers are “desirable” to strengthen European banks in their competition with major US rivals.

Luis de Guindos, the Spanish Vice-President of the ECB, has similarly criticized the German government’s protectionist stance.

In a recent opinion piece published in the Handelsblatt newspaper, Omid Nouripour, Deputy President of the Bundestag (Alliance 90/The Greens), accused the federal government of inconsistency.

Nouripour argued that while the government champions a banking union at EU summits, it reacts to a concrete cross-border bank merger with a “reflex of a national ownership mentality.” He criticized the federal government for praising European integration only “as long as it remains abstract.”

EU Competition Commissioner Teresa Ribera also urged member states to support cross-border banking consolidations. “Member states should welcome such transactions for the public good,” Ribera said.

Signals of compromise from Berlin

The German federal government initially reacted with hostility to UniCredit’s successful takeover bid.

“From the federal government’s perspective, UniCredit’s aggressive and hostile approach remains unacceptable,” the Federal Ministry of Finance said in a statement.

At the same time, Berlin rejected the Italian bank’s takeover offer for its remaining Commerzbank shares.

Last week, Chancellor Friedrich Merz, speaking before parliament ahead of the summer recess, reiterated that the federal government had not accepted UniCredit’s offer and was retaining its shares, unlike a “significant portion” of other shareholders.

However, in the same address, Merz adopted a more conciliatory tone, assuring, “We are not blocking this merger.”

According to the Handelsblatt newspaper, the terms of the takeover are currently being negotiated within the federal government.

Among other stipulations, Berlin is demanding that Commerzbank remain a key lender for German small and medium-sized enterprises.

In addition, the federal government is demanding that Frankfurt, the historic headquarters of the financial institution, remain a major hub for the bank.

UniCredit’s German headquarters has been based in Munich since its 2005 acquisition of HypoVereinsbank.

The European Union’s technology chief, Henna Virkkunen, has warned that artificial intelligence is turning into a geopolitical weapon.

In an interview with the Financial Times, Virkkunen emphasized that Europe must rapidly develop its own alternatives to US models or risk being deprived of strategic capabilities.

Virkkunen said Brussels fears becoming “dependent on third countries for these highly critical technologies.”

The technology commissioner warned that governments with the power to cut off access to artificial intelligence models could use this leverage for their own interests.

The EU’s concerns regarding dependence on US technology became a reality in June, when Washington imposed export restrictions on leading models from Anthropic due to security concerns.

Although those measures were lifted following pushback from foreign governments and Silicon Valley, the incident reignited fears that the US could, through emergency decisions, cut off access to technologies that underpin the European economy.

Virkkunen stated that those who control critical technologies “not only dominate the economy” but also possess “a major strategic asset” at a geopolitical level.

The Finnish politician, who oversees technology and cybersecurity at the European Commission, continued:

“The access restriction applied to Anthropic showed us very clearly how important it is to be prepared for this kind of reality in our cybersecurity landscape. We know that in the coming months and years, even more of these highly capable AI models will enter the market. Therefore, we must be very well prepared for this.”

Virkkunen likened the situation in artificial intelligence to the decision by the previous Joe Biden administration to impose export restrictions on cutting-edge chips. That decision had divided EU member states into those granted access and those denied it.

“AI capabilities are truly strategic assets today, and that is why it is very important for us to establish our own technological sovereignty,” Virkkunen said.

Last month, Brussels presented a technological sovereignty package aimed at reducing dependence on US technology by supporting European alternatives in sectors ranging from semiconductors to cloud computing and artificial intelligence.

The plan includes incentives to accelerate the construction of European data centers and support domestic cloud and AI technologies, such as the AI company Mistral, as well as cloud providers like Scaleway or OVHcloud.

“It is very important for Europe to develop its own capacities and for us not to depend on third countries for these highly critical technologies,” Virkkunen said.

To fund these investments, the EU and the European Investment Bank will establish a new mechanism to make strategic investments in European technology companies.

Meanwhile, Brussels is continuing bilateral discussions with the US administration to ensure ongoing access to the most advanced AI models.

Leaders from the EU, France, Germany, and Italy also used the G7 summit in June as an opportunity to discuss with US President Donald Trump the possibility of establishing a “trusted partner” program to ensure continuous access to the most powerful AI models, which have the capability to detect critical cybersecurity vulnerabilities.

“We continue to work on this [proposal] at the international level,” Virkkunen said.

German Foreign Minister Johann Wadephul has conducted high-level talks in Mauritania aimed at securing “energy imports,” signaling a continued expansion of Berlin’s diplomatic and economic outreach across Africa.

The initiative seeks to secure natural gas and green hydrogen from the African continent to compensate for structural deficits in Germany’s energy imports from Russia and the Persian Gulf, which have been severely disrupted by conflict.

According to a report by German Foreign Policy, the German minister held discussions in Mauritania on Monday focusing, among other agenda items, on future green hydrogen imports. Mauritania is currently positioning itself to become a primary hub for the green hydrogen economy in West Africa.

Following his talks in Nouakchott, Wadephul is scheduled to arrive in Nigeria today, where Berlin expects to secure deliveries of both green hydrogen and natural gas.

The diplomatic push follows meetings last week between German Chancellor Friedrich Merz and Algerian President Abdelmadjid Tebboune. Berlin is actively seeking to procure both natural gas and green hydrogen from Algeria.

However, critics have sharply condemned the strategy—which includes the construction of a major hydrogen pipeline beneath the Mediterranean Sea—labeling it a “neo-colonial project.” Detractors argue that the initiative risks exploiting the resources of the Global South at the direct expense of local economic development.

From Berlin’s perspective, these steps have become geopolitically non-negotiable. Intense systemic competition with Russia and the US-led conflict against Iran have severely threatened and disrupted Germany’s established raw material and energy supply chains.

Algeria’s strategic importance to Germany grows

Algeria is rapidly emerging as an increasingly critical natural gas supplier for Germany.

The North African nation holds the second-largest proven natural gas reserves on the continent after Nigeria, and stands as Africa’s largest exporter of natural gas.

Furthermore, Algeria is Europe’s second-largest supplier of pipeline gas, utilizing two major pipeline networks stretching north across the Mediterranean Sea: one terminating in Spain, and the other in Italy.

In addition to pipeline infrastructure, Algeria exports liquefied natural gas (LNG). In early July, the Wilhelmshaven 1 gas terminal received its maiden shipment of Algerian LNG from the state-owned energy enterprise Sonatrach, with subsequent deliveries expected to follow.

These Algerian shipments are helping Berlin reduce its heavy reliance on hydraulic fracturing (fracking) gas imported from the US. Last year, US-sourced LNG accounted for 96% of all imports arriving at German LNG terminals.

At the same time, Algeria is advancing the construction of the Trans-Saharan Gas Pipeline. This infrastructure project is designed to transport natural gas from Nigeria, through Niger, and into Algeria, where it will connect to existing Mediterranean pipelines bound for Europe.

The pipeline’s projected transit capacity is up to 30 billion cubic meters of natural gas annually.

Germany and the broader European Union are actively incentivizing natural gas imports from Africa. The strategy is designed not only to replace sanctioned Russian gas imports that are no longer available, but also to establish greater strategic independence from Middle Eastern gas supplies threatened by the conflict in Iran.

Africa’s role in the “green” transition

Over the longer term, Algeria is projected to play an even more significant role for Germany in the supply of green hydrogen—produced via renewable energy sources—which Berlin plans to deploy on a massive industrial scale as a foundational future energy source.

Berlin is currently planning multiple infrastructure projects to facilitate these green hydrogen imports. Chief among these is the “South H2” pipeline, designed to transport green hydrogen from Algeria through Tunisia and across the Mediterranean Sea into Italy, Austria, and Germany.

In Europe, the pipeline project is backed by a consortium of energy infrastructure firms, including the Italian pipeline operator Snam, Gas Connect Austria, and BayerNets.

The European Union has designated the pipeline as a “Project of Common or Mutual Interest” and has classified it as a flagship project of its “Global Gateway” infrastructure initiative, allocating corresponding EU financing.

To produce the requisite volumes of green hydrogen, Algeria plans to construct utility-scale renewable energy generation facilities.

German Chancellor Friedrich Merz discussed the project in detail last Thursday with Algerian President Abdelmadjid Tebboune during the latter’s official visit to Berlin.

Merz stated that Germany, in cooperation with Italy, plans to “advance the development of the southern hydrogen corridor” in order to “intensify hydrogen exports” to Germany.

Intra-European competition in Africa’s hydrogen economy

Foreign Minister Johann Wadephul’s current diplomatic mission to Mauritania represents a parallel effort to secure additional green hydrogen capacities.

Mauritania is actively working to transform its domestic economy into a regional hub for renewable energy-based hydrogen production.

One of the largest planned industrial developments in the country is being led by a joint venture comprising the German project developer Conjuncta, the Egyptian firm Infinity, and the United Arab Emirates-based Masdar Group.

The project represents a $34 billion investment aimed at installing 10 gigawatts of electrolysis capacity to produce green hydrogen earmarked for export to Europe.

This mega-project, known as “Infinity Power,” faces direct competition from a rival development named “Nour.” Initiated by Chariot Resources of the United Kingdom, TotalEnergies of France, and the Luxembourg-based Eren Group, the Nour project is also designed for 10 gigawatts of electrolysis capacity. However, this project is structured to prioritize Mauritania’s domestic energy requirements first, with only surplus volumes designated for export to Europe.

Prior to his arrival in Mauritania, Wadephul noted that the country “offers significant opportunities for renewable energy, particularly in the production of green hydrogen.”

While in Nouakchott, the Foreign Minister stated his intention to discuss “possibilities” for bilateral cooperation in “future technology sectors.”

Berlin seeks to reduce energy dependencies

Germany is also pursuing deeper strategic cooperation with Nigeria regarding both LNG and hydrogen. Wadephul is scheduled to arrive in Nigeria today for detailed consultations.

In November 2023, Germany and Nigeria signed a bilateral agreement under which Berlin committed to investing $500 million in renewable energy projects across the West African nation. In exchange, Germany secured commitments for LNG deliveries, with initial shipments scheduled to commence this year.

Much like the imports from Algeria, these Nigerian deliveries are intended to diversify Germany’s gas supply. They aim to further reduce Berlin’s reliance on US LNG, even as Germany phases out Russian LNG imports and navigates supply constraints from other traditional sources such as Qatar.

Furthermore, Berlin is evaluating the long-term potential of importing green hydrogen from Nigeria. In the autumn of 2023, then-Chancellor Olaf Scholz stated that Nigeria was not only “well-positioned” to supply Germany with the LNG “that we will continue to need in the coming years until the hydrogen market is fully established,” but could also become a “key actor” in Germany’s future hydrogen supply chain.

The German government has maintained an active “hydrogen partnership” with Nigeria for several years, which includes the operation of a dedicated “hydrogen office” in the country.

A “neo-colonial” project?

The planned hydrogen pipeline from Algeria to Germany has drawn sharp, systematic criticism from civil society organizations concerned about the geopolitical implications of the green energy trade.

In a joint protest declaration signed by 87 non-governmental organizations in March 2023, critics argued that hydrogen imports by Germany and other wealthy Western nations from Global South partners perpetuate an exploitative economic dynamic. They assert that the model prioritizes exporting domestic resources to wealthy Western economies at the expense of local populations.

Opponents contend that this framework “perpetuates the exploitative legacy of the past,” preventing independent development within Global South nations.

Critics also warn that the model strengthens multinational fossil fuel companies by enabling them to preserve legacy corporate structures through the construction of new pipelines and transport infrastructure.

They argue this occurs to the detriment of the Global South, where domestic economic development is systematically delayed by raw material extraction rather than the establishment of localized, high-value industrial supply chains.

Consequently, these organizations argue that the construction of the pipeline and the utilization of Global South renewable energy capacity for European consumption constitutes “a neo-colonial project.”

According to critics, this characterization applies equally to the other natural gas and hydrogen initiatives pursued by Foreign Minister Wadephul during his current African tour.