ECB leans toward approving UniCredit’s Commerzbank bid

The European Central Bank is leaning toward approving UniCredit SpA's takeover of Germany's Commerzbank, according to an internal document reported exclusively by Reuters on Wednesday, in what would clear the main regulatory hurdle for the largest EU banking deal since the global financial crisis.reuters

The document, presented last month to the ECB's Supervisory Board, found "no grounds to object" to the transaction but characterized the expected integration as "challenging and long-lasting." A final review is expected in September or October, with the ECB noting that UniCredit's application remained incomplete at the time of the presentation. A full application was submitted in late July.live.euronext+1

German Regulator Raises Governance Concerns

The document reveals previously unreported objections from Germany's BaFin, which highlighted what it called "aggressive and partially intransparent behaviour" by UniCredit during the takeover process. BaFin also flagged "weaknesses in checks and balances" at the Italian lender and said the hostile nature of the bid had alienated Commerzbank's management, staff, unions, and political stakeholders.reuters+1

German supervisors are requiring UniCredit to develop "a mitigation strategy" to rebuild trust within Commerzbank and to strengthen its own governance controls.reuters

ECB Finds No Basis to Block

Despite acknowledging many of the same challenges, the ECB concluded they did not justify blocking the deal. Concerns over UniCredit's board had already been addressed through supervisory measures including more detailed board minutes and stronger oversight, the document stated. Anti-money laundering shortcomings at UniCredit's German subsidiary were also being remedied.live.euronext+1

UniCredit has built a roughly 48% stake in Commerzbank through a €43 billion hostile bid, prompting resistance from management and the German government, though some opposition has recently softened. The ECB is scrutinizing UniCredit's assumption that it can maintain a 12.5% capital ratio after taking a 51% stake, though such review is described as routine rather than a signal of opposition.reuters+1

Spokespeople for the ECB, BaFin, UniCredit, and Commerzbank all declined to comment on the document.reuters