From CNBC: 2024-09-26 01:20:13

UniCredit of Italy is pressuring Commerzbank of Germany in a potential takeover move, raising concerns and catching German authorities off-guard. This clash poses a challenge for German Chancellor Olaf Scholz and may impact European banking union and capital markets integration efforts.

The European banking union, initiated in 2012 post-global financial crisis, remains incomplete with the absence of an EDIS. Germany’s opposition to UniCredit’s takeover hints at favoring integration on their terms. Hostile takeover bids in European banking are rare, with BBVA’s attempt on Banco Sabadell facing hurdles and uncertainty.

European policymakers are striving for a complete banking union, facing challenges with an existing mix of national and EU authorities. Germany and Spain’s reservations on banking consolidation pose further obstacles. UniCredit’s move on Commerzbank has set off a complex and potentially lengthy multibillion-euro merger process.

Germany’s sale of a 4.5% stake to UniCredit unintentionally puts Commerzbank in a takeover spotlight. Advocates for a strong European banking landscape emphasize the need for consolidation, which may result in a German bank being acquired. The UniCredit-Commerzbank saga is expected to play out over months or even longer, involving regulatory procedures and extensive negotiations.

Read more: UniCredit’s pursuit of Commerzbank is a watershed moment for Europe