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.