As per the reports of the Financial Times, the Italian lender plans to call an extraordinary general meeting once it receives the remaining regulatory approvals needed to take control of Germany’s second-largest bank.

“UniCredit expects to secure control by the end of February and replace all 10 shareholder representatives on Commerzbank’s 20-member supervisory board, giving it an effective majority,” the media outlet stated further.

The latest scoop emerges amid UniCredit’s accelerated efforts to close the two-year battle, which the Italian lender successfully fought against the German government and the Commerzbank management.

While Berlin has softened its stance on a potential deal after UniCredit built a stake of nearly 50% in the German lender, Friedrich Merz has continued to demand that Commerzbank remain listed, keep its ⁠Frankfurt headquarters, and maintain its role in financing German medium-sized companies at home and abroad.

Germany won the right to appoint two board members ⁠when it rescued Commerzbank in 2009 during the global financial crisis. It retains a stake of 13.3% in the bank.

As per reports, Orcel wants sweeping changes at Commerzbank, including the departures of CEO Bettina Orlopp and Chairman Jens Weidmann.

Orlopp has, however, maintained a cooperative stance, proposing that Commerzbank could potentially acquire UniCredit’s German bank HVB in shares to create a mutually beneficial merger.

Orlopp, speaking at a financial conference last week, ⁠said such a deal structure was one of several “options on the table” as a way to increase UniCredit’s shareholding in Commerzbank.

Orlopp also said that the other ways to structure a deal include a ⁠simple merger between Commerzbank and UniCredit or by UniCredit making another offer to the remaining ⁠Commerzbank shareholders—”most likely with a premium”—to get its shareholding ⁠above 90%.

She concluded by stating that all three basic options are available.

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The UniCredit boss has also objected to Berlin keeping two supervisory board seats while pressing for the removal of Commerzbank Chairman Jens Weidmann.

Klingbeil and Orcel met on Monday on the Italian bank’s takeover plans, a turning point in the two-year battle for control of one of Germany’s biggest banks after Berlin failed in its attempt to stop UniCredit from taking the venture over.

While Orcel placed the conditions, which the Commerzbank leadership may call humiliating, both sides ⁠called the meeting “constructive.”

A spokesperson for Commerzbank dismissed any changes in management, telling Reuters that “The board of Commerzbank AG has running contracts, the supervisory board is elected by the general assembly, and there’s full alignment on strategy.”

“We are currently represented on Commerzbank’s supervisory board and will continue to be,” Klingbeil told reporters on Tuesday, adding, “And, naturally, if and when the time comes, we also expect to be represented on UniCredit’s board.”

“The meeting was a good and constructive initial discussion that will be swiftly followed by others. It’s for both sides to now reflect on this initial discussion so that a way forward can be found in the best interest of all stakeholders and shareholders,” Orcel, from his part, told the media.

Orlopp, in August, said that she was not feeling pressure to give up her role as the Commerzbank CEO after the months-long ownership battle over Germany’s second-largest bank.

Both Orlopp and Weidmann want Commerzbank to remain an independent entity.

Orcel’s latest demand asking for Commerzbank’s top leadership’s removal is not a surprising one, as he, in the past, repeatedly wanted to engage with the German lender’s employee representatives, local authorities, and central government, omitting Orlopp and Weidmann.

“UniCredit is in a position to call an extraordinary shareholder meeting and appoint new shareholder representatives at Commerzbank,” Orcel said in one of his latest statements.

Germany won the right to appoint two board members when it rescued Commerzbank in 2009 during the global financial crisis. The federal government currently retains a stake of 13.3%, and it ⁠is not clear how UniCredit could block Berlin retaining two members while it remains a shareholder.

In addition to the board seats, Berlin has set out several other demands relating to a UniCredit takeover, including Commerzbank remaining listed on the stock exchange, keeping its base in Frankfurt and continuing to finance German ⁠medium-sized companies at home and abroad.

However, German government officials and Commerzbank executives have officially softened their stance on a potential deal after UniCredit amassed a stake of nearly 50% in its acquisition target.

A combination of UniCredit and Commerzbank would create a bank with more than 1.3 trillion euro in assets across two of the euro zone’s largest economies.

In 2024, Orcel unexpectedly secured Commerzbank as UniCredit’s acquisition target by discreetly accumulating a stake, surprising both the German lender and the government.

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German Finance Minister Lars Klingbeil will be pressing the demand, along with other conditions, during a planned meeting with UniCredit CEO Andrea Orcel in Berlin next week.

A combination of UniCredit and Commerzbank would create a bank with more than 1.3 trillion euro in assets, encompassing two of the euro zone’s largest economies.

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Weidmann was quoted as telling German newspaper Sueddeutsche Zeitung that UniCredit’s approach raised questions because it had been able to obtain a majority despite making what he described as a financially unattractive offer.

“Of ⁠the roughly 73% of Commerzbank shares that could have been tendered to UniCredit, fewer than 18% were tendered,” Weidmann said.

“Institutional and retail investors accounted for less than 3 percentage points, with the remainder coming from banks linked to UniCredit,” the supervisory board chair added further.

“UniCredit was thus able to achieve a majority with a financially unattractive offer without paying an appropriate control premium. That raises questions about takeover law in Germany, which lawmakers may ‌want ⁠to examine,” Weidmann told the German daily.

UniCredit’s offer period has ended, but the deal is not yet fully settled, as regulatory approvals are still required before the Italian lender goes ahead with the possession of the tendered shares.

Commerzbank’s spirited two-year campaign against the UniCredit takeover faded in July as the Italian lender gradually accumulated ⁠a stake of 48%, more than enough to determine the German bank’s shareholder resolutions.

Weidmann has also urged the German government to retain its Commerzbank stake for now, despite the holding having ⁠originated in a rescue package during the 2008 global financial crisis.

“The stake was part of a rescue measure, so the federal government should eventually withdraw. But in the current phase, it makes sense for the government to remain a shareholder in order to actively represent the interests of Germany as a business location,” Weidmann concluded.

Commerzbank, which registered stronger-than-expected second-quarter earnings by reporting a 94% year-on-year jump in net profit to 898 million euro, has already begun talks with UniCredit over the potential takeover.

Chief executive Bettina Orlopp, in the first week of August, said, “We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees. I’m optimistic that, step by step, we can find common ground on governance and also on the business model.”

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The announcement came alongside stronger-than-expected second-quarter earnings, with Commerzbank reporting a 94% year-on-year jump in net profit to 898 million euro, comfortably beating analysts’ consensus forecast of 845 million euro. The performance was driven by stronger commission income, giving management added momentum as negotiations gathered pace.

Chief executive Bettina Orlopp said discussions had started “in the genuine interest of both UniCredit and Commerzbank,” adding that both lenders were focused on creating value for shareholders, customers and employees.

“We have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank, as we are both determined to create value for our shareholders, clients and employees,” she told the analysts.

“I’m optimistic that, step by step, we can find common ground on governance and also on the business model,” she told analysts, signalling a markedly softer tone after months of resisting UniCredit’s advances.

The change in stance reflects the growing influence of UniCredit, which has built a 48% stake in Commerzbank as part of its 45 billion (USD 52 billion) euro takeover pursuit.

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The announcement, made to staff on the bank’s intranet and seen by the media outlet Reuters, marks a significant turn in the months-long battle ⁠over control of Germany’s second-largest lender.

While Orlopp and her management team have been opposed to a tie-up, they have conducted several – yet unsuccessful – talks with UniCredit in the past months.

“In the weeks and months ahead, Commerzbank and UniCredit will engage in discussions to determine, step by step, how to move forward,” Orlopp told employees in the internal post, while stating the goal of the talks will be to strengthen the bank’s systemic relevance to Germany.

“The German federal government, employee representatives, and our supervisory board have ⁠all made clear that they now expect UniCredit to engage with Commerzbank constructively. And I think UniCredit is ready for that, too. Because without dialogue, there can be no value creation,” she said further.

Orcel also expressed the willingness to negotiate with the German government and Commerzbank employees. However, the approach, as per the analysts, would be a problematic one, as it looks to sidestep the German lender’s management.

It is worth mentioning that the German Finance Ministry oversees a 12% stake in the Commerzbank, which has been held by the government since the venture’s bailout during the global financial crisis.

UniCredit invested in Commerzbank in ⁠September 2024, launching a nearly two-year tug-of-war that pitted Italy’s and Germany’s number two banks against each other. UniCredit has since built a 48% stake in its rival.

Orlopp’s statement comes after the message of the bank’s chairman, Jens Weidmann, who said that the Italian bank’s dominance of its shareholder base ⁠meant “constructive talks” were needed to establish a framework in the interests of shareholders and staff.

While stating that Commerzbank would have preferred a different outcome from the whole saga, Weidmann implied that he had no other choice but to enter the talks ‌with ⁠the Orcel-led venture.

“We have to have constructive talks to establish the key parameters for staff, shareholders and the customers of the bank. Everyone needs to act like adults now, because one thing is certain: ⁠These discussions are in UniCredit’s interest as well, and there will be no ⁠shortcut via Berlin,” Weidmann ⁠said.

Weidmann’s response came within the 24 hours of UniCredit’s remark, in which it asked its German counterpart to start adopting the strategy the Italian bank ‌has mapped out in January 2026.

Orcel, from his part, raised the pitch further by stating that his business had the option of using its 48% stake to install a new board.

The whole takeover saga, which has also seen severe opposition from the German government, has been the grim reminder about ⁠the difficulty of merging large banks across Eurozone countries, despite policymakers wanting more tie-ups to compete with bigger American rivals.

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The bank’s chairman, Jens Weidmann, said that the Italian bank’s dominance of its shareholder base ⁠meant “constructive talks” were needed to establish a framework in the interests of shareholders and staff.

While stating that Commerzbank would have preferred a different outcome from the whole saga, Weidmann signaled that he had no other choice but to enter the talks ‌with ⁠the Andrea Orcel-led venture..

“We have to have constructive talks to establish the key parameters for staff, shareholders and the customers of the bank. Everyone needs to act like adults now, because one thing is certain: ⁠These discussions are in UniCredit’s interest as well, and there will be no ⁠shortcut via Berlin,” Weidmann ⁠said.

Weidmann’s response came within the 24 hours of the UniCredit’s remark, in which it asked its German counterpart to start adopting the strategy the Italian bank ‌has mapped out in January 2026. Orcel raised the pitch further, by stating that his business had the option of using its 48% stake to install a new board.

Boosted by better than expected earnings and an upgraded its profit outlook, Orcel has taken an assertive path now, by asking for talks with the Berlin government, a Commerzbank shaPrareholder, and the German lender’s worker representatives.

However, both the stakeholders have asked the UniCredit boss to engage with his Commerzbank counterpart Bettina Orlopp.

“We are in a position to call an extraordinary general meeting and exercise … control. We would do that if that’s necessary, but our expectations are (not to have) to do that at ⁠the moment, if we have everybody on board and on the same direction … from January 1,” Orcel told analysts.

Orcel, a veteran dealmaker, has tactically used derivatives, to complete the takeover of Commerzbank.

“We got to control (of Commerzbank) potentially without making any concession, as you usually would in a transaction. So now we are quite open,” he told CNBC television.

UniCredit first invested in Commerzbank in 2024, prompting Germany to reject the Milanese lender’s approach as hostile and back Commerzbank’s quest to remain independent. The European country’s finance ministry has still maintained its aggressive stance against the Itaian lender, apart from calling the latter to engage in a constructive approach. Sascha Uebel, head of the Commerzbank’s works council, criticised UniCredit for turning to worker representatives.

“Can we all please act like adults now? Under corporate law, management decides what happens ‌in a ⁠company,” he said.

Germany still owns 12% of Commerzbank after a 2009 bailout, a stake UniCredit needs to buy to eventually merge Commerzbank with its own German business HVB in two or three years’ time.

UniCredit also sees economic gains from Commerzbank adopting its strategy. On July 23, it raised the estimated benefits by 50% to 1.2 billion euro (USD 1.4 billion) before taxes.

Orlopp has said that terms for any takeover negotiations should reflect the importance of ⁠Germany for the combined group and respect the Frankfurt-based lender’s business model.

Declining costs and strong net fees drove UniCredit’s second-quarter profit to 2.9 billion euro. UniCredit now expects 2026 income comfortably above 11 billion euro, compared with previous guidance for a result in line or above that figure. Orcel sees the tally rising to significantly more than 13 billion euro in 2028, excluding the full consolidation of Commerzbank.

By cancelling a ⁠planned 4.75 billion euro share buyback, UniCredit will keep its core capital at 13% of assets in 2026 despite the hit it will take, by consolidating Commerzbank into its accounts. The buyback cancellation, however, has weighed on the bank’s shares, which fell 3.6%.

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While the latest development puts UniCredit a step closer to gaining decisive control of Commerzbank, which it has been trying to buy ‌since 2024, Orcel, the chief architect of the cross-border deal, now faces the choice of whether he wants to lift the stake above 50%, which would allow his bank to propose board changes at Commerzbank, or attempt to first build consensus, as the banking industry veteran had pledged to do.

UniCredit, which has been present in Germany since 2005 through its Bavarian unit HVB, could still struggle to advance its takeover project, as the latter is facing a united opposition from the Friedrich Merz government, unions, and Commerzbank itself.

Commerzbank, in its latest reaction, has said that less than 2% of institutional and retail ⁠investors had tendered their shares as part of UniCredit’s offer, reiterating its same stance again.

“The low acceptance ‌rate ⁠among independent shareholders is clear evidence of ⁠the low attractiveness of the ⁠offer,” Commerzbank said.

Germany’s Finance Ministry, on the other hand, renewed its criticism of UniCredit, calling the Italian lender’s “aggressive and hostile approach” unacceptable.

The Merz government still holds 12% of Commerzbank following a 2009 bailout. While expressing its displeasure over UniCredit’s share tendering practices, Commerzbank has remained open to constructive dialogue with ⁠its Italian counterpart.

Orcel and his Commerzbank counterpart Bettina Orlopp have held several rounds of short-lived informal talks, but attempts to hold substantive negotiations over the takeover bid have so far failed to produce fruitful results due to disagreements.

UniCredit, facing unsurmountable pressure in Germany, now expects the European Central Bank (ECB) to declare it to be in control of Commerzbank under German rules.

It would, however, need majority ownership in order to name all shareholder representatives, while overhauling Commerzbank’s supervisory board, as Orcel has suggested it may seek to do.

As per Hans-Peter Burghof, chair of banking and financial services at the University of Hohenheim, workers’ representatives hold half the seats on the board, and they “dislike” UniCredit’s approach.

Orlopp, Stepping into the situation, reportedly put forward a video message ⁠to employees on the bank’s intranet, where she urged for calm.

“With the results of the takeover offer, we are now facing a situation that is new for all of us. But we will not let it unsettle us,” Orlopp said according to a transcript of the message seen by media outlet Reuters.

What could potentially make Commerzbank’s acquisition a difficult affair for UniCredit is the bailout contract that, as per Burghof, also reserves two seats for the government on the German lender’s board.

Angering Commerzbank further, Orcel has laid out to investors his plans to boost the German lender’s profits, which, once in control, ‌he would ⁠reportedly implement over a couple of years while keeping Commerzbank separate from HVB.

Having built a 26.7% stake in the rival lender since September 2024, UniCredit stepped up its efforts in May 2026 by launching a tender offer, in which, instead of seeking control, the Italian lender wanted to nudge its stake above 30%, which would free it to buy more shares on the market without triggering a mandatory buyout.

UniCredit told the Commerzbank, “Take-up of the offer totalled 17.6%. That is up from 12.5% before a two-week extension of the tender period dictated by German takeover laws.”

Since then, the two entities have been involved in an ugly spat over the ⁠take-up data. As per Commerzbank, shares had been tendered mostly by investment banks that were counterparties in swap contracts UniCredit had entered on Commerzbank shares.

Excluding treasury shares, which carry no voting rights, UniCredit has a 49.7% voting stake in Commerzbank, well above the threshold of around 40%, which generally entails a position of control under Germany’s corporate rules. However, going by the same rules, being declared in control without majority ownership ⁠would force UniCredit to consolidate a minority stake.

UniCredit also has the choice of opting to amend swap contracts it owns, which currently can only be settled in cash and not shares, handing it a further 11.5% of Commerzbank.

As per Commerzbank management, a combination of the banks could result in 11,000 job cuts, while the works council has ⁠projected 23,000 cuts. The German lender, which has around 38,000 full-time positions, has undertaken several rounds of major cuts over the past ⁠decade, including 3,000 jobs earlier in 2026 and a 2021 deal with the unions, in which 10,000 jobs got axed.

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The letter, signed by CEO Bettina Orlopp and being mailed to shareholders, said UniCredit’s offer isn’t high enough and that the Italian bank had ⁠not presented a “sound plan” that builds on the German bank’s ⁠strengths.

While maintaining that ⁠it published the figures to increase transparency, Commerzbank also said that institutional investors have tendered just somewhat more than 1% of shares in UniCredit’s takeover offer.

The two banks have been in a bitter battle for control for ‌months, ⁠and UniCredit’s all-stock acquisition offer is currently ongoing.

“The shareholder structure ⁠remains largely unchanged. Of the 12.51% of tendered shares, ⁠institutional investors have tendered 1.29% of shares, retail ⁠investors 0.05%, and banks 11.17%,” Commerzbank said, while pressing up the attack on UniCredit.

UniCredit’s CEO Andrea Orcel, on the other hand, said that he and the Italian lender’s top leadership are expecting the European Central Bank (ECB) to declare the financial venture in control of Commerzbank, given how much it owned after its takeover offer.

“At the moment, it is a lot more probable that we end up with what the ECB would call control than not,” Orcel told the recently concluded annual Mediobanca CEO conference in Milan.

“Due to minority holding rules, merging its accounts with those of Commerzbank without majority ownership would cost ⁠UniCredit 40% more in terms of core capital. We never launched this offer to go to control. Now we are in a situation where we might,” Orcel added further.

As per UniCredit, it launched a voluntary exchange offer for Commerzbank shares on May 5; it simply wanted to nudge its 27% stake above the 30% mandatory takeover threshold, apart from being able to freely buy more on the market in 2027. The offer, which carried a very modest premium, concluded on June 16 with a 12.5% take-up, handing UniCredit 42.5% control of Germany’s Commerzbank.

“At this level, UniCredit will be able to determine the outcome of shareholder resolutions, prompting the ECB, which is reviewing the matter, to declare it in control of Commerzbank,” Orcel noted.

The CEO is also keen to preserve UniCredit’s capital reserves to keep up its payout policy and for consolidation in Italy.

The offer has been vehemently opposed by the Commerzbank and German government due to accusations and concerns over acceptance data and UniCredit’s use of derivatives. As per Commerzbank, the shares have been tendered by banks, not institutional investors, and in most cases, banks that were UniCredit’s swap counterparties.

Orcel, countering the allegations, said excluding passive investors (as they cannot sell their stakes), all institutional Commerzbank investors except five have either tendered or sold their shares.

“We confirm that institutional and retail investors have only contributed around 1% of the tendered shares, reflecting that the offer does not represent the value of Commerzbank as seen, amongst others, by independent market research,” he added.

Commerzbank hit back by reiterating its view that ⁠the take-up was not proof that the market liked the bid.

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While the Friedrich Merz administration cited factors like a low price and concerns about the Italian bank’s “aggressive approach,” behind its rejection of the UniCredit’s proposal, Orcel, on June 18, ended up criticizing Germany’s banking ⁠sector.

“Germany is the market in Europe where customers are the least satisfied. ‌Some ⁠27% of Germans don’t like the services that banks give. It is the market with the highest penetration of fintechs ⁠and where American banks are gaining the most market ⁠share from the top down,” Orcel said during a business conference ⁠in Rome.

UniCredit, on June 15, accused Commerzbank of “misleading the public” over the merger talks. Hitting back at this, Orlopp said on the same day, “We have, of course, simply presented the facts, and ‌we ⁠will continue to do so, because we are the ⁠only ones who actually have access to ⁠them.”

The main bone of contention here has been the fact that UniCredit’s all-share offer comes with a discount that allegedly undervalues the German bank’s shares. As per Commerzbank, none of UniCredit’s institutional investors have tendered their shares. While reaching out to BaFin, Germany’s Federal Financial Supervisory Authority, with the request of investigating UniCredit’s take-up data, Commerzbank stated that the shares came from banks which, in most cases, are counterparties of UniCredit, which reportedly holds derivatives with Nomura, Citi, and BNP Paribas.

“Suggestions that the actual number of tendered shares is lower because these shares have been borrowed from UniCredit are false and without foundation. We have been compelled to clarify our position to set ‌the ⁠record straight because of the continued and relentless dissemination of inaccurate and misleading information, which was interfering with the offer process,” the Italian bank said in a statement, while attacking Commerzbank.

After saying ⁠its goal was to lift its stake just above 30%, UniCredit has so far secured around 40% of Commerzbank, enough to give the Italian venture control of shareholder resolutions at meetings. Despite that, UniCredit skipped Commerzbank’s last annual general meeting, stating that ⁠should it secure sufficient support at a future AGM, it would be in a position to appoint all shareholder representatives on the supervisory board.

“This would have responsibility for appointing the management board,” UniCredit said, adding that the move would have allowed it to ⁠implement a profit-boosting strategy it had previously promised for Commerzbank.

As of June 15, UniCredit’s take-up stood at 11.91% of Commerzbank’s capital, giving the Italian venture an overall holding of 41.9%, including a 26.77% equity stake it had previously built and another 3.22% in share-settled derivatives. UniCredit also holds 13.19% of Commerzbank in cash-settled derivatives.

With both banks digging in their heels in the months-long battle for control of one of Germany’s most important lenders, BaFin’s entry onto the battlefield has now made things complicated. Post-2008 global financial crisis, the German government started holding stakes in Commerzbank. While the ratio stands at 12% currently, the federal administration has been a vocal critique of UniCredit’s tie-up attempts.

“Accepting the offer was already not an option from a financial point of view, as it does not include an appropriate premium on the current share price of Commerzbank’s shares,” BaFin said.

Despite Berlin’s opposition, UniCredit could still win control of the German bank. However, the Merz administration’s 12% stake gives it seats on Commerzbank’s supervisory board, which appoints management and helps oversee its strategy.

BaFin, which also manages the government’s holdings, further supported Commerzbank’s independence, noting that the bank played a critical role in financing medium-sized Mittelstand companies and was an integral player in Frankfurt, the European nation’s financial ‌hub.

Frankfurt prosecutors, on the other hand, have reportedly begun a preliminary investigation into possible market manipulation related to UniCredit’s offer. In response, UniCredit said that it was aware of the matter and that the prosecutors’ response was “in line with protocol when such complaints are filed.”

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