Bangkok:The European Central Bank (ECB) has authorized Italy's UniCredit to increase its stake in Germany's Commerzbank beyond 30%, removing a key barrier in its effort to take control of the German financial institution.

According to Anadolu Agency, UniCredit announced that this approval enables it to exceed the 30% ownership threshold and potentially increase its stake without any upper limits. The bank anticipates obtaining the remaining regulatory approvals and fulfilling the offer conditions by the end of the year. This would grant UniCredit approximately 50% of Commerzbank's voting rights, effectively allowing it to take control.

UniCredit considers the ECB's decision a significant milestone in its acquisition process, reflecting a positive assessment of the transaction and confidence in UniCredit's financial stability and position in Europe's banking sector.

This transaction aligns with the ECB's advocacy for cross-border banking mergers to bolster the European Union's single market.

Despite these developments, the German government and Commerzbank's management have shown resistance to the takeover. However, German Finance Minister Lars Klingbeil described recent discussions with UniCredit as constructive. He made these comments during the International Monetary Fund's annual meeting in Bangkok, noting that talks between both parties' teams were continuing constructively.

The German government's concerns include job protection, maintaining Commerzbank's Frankfurt headquarters and stock market listing, and preserving its lending to small and midsize businesses. The government, which still holds a 13.3% stake in Commerzbank after a financial crisis bailout, seeks to address these issues collaboratively.

Commerzbank's management, led by Chief Executive Bettina Orlopp, has long resisted the takeover but remains engaged in seeking a negotiated solution with UniCredit.