(Bloomberg) -- UniCredit SpA is set to ask for regulatory permission to build a stake of as much as 30% in Commerzbank AG, as Chief Executive Officer Andrea Orcel pursues a potential takeover of the bank.
The Italian lender will likely file the application to the European Central Bank, which is the euro area’s top banking regulator, in the next few days, according to a person familiar with the matter. The move doesn’t necessarily mean UniCredit will end up reaching that threshold or even buy any additional shares, the person said, asking not to be named discussing private information.
The approach to the ECB would edge Orcel closer to a full acquisition of the German lender, given that reaching such a stake means a company has to make an offer for the target under German law. ECB officials, including President Christine Lagarde, have made approving noises about the prospective deal, as it could fulfill long-held ambitions to realize big cross-border mergers.
UniCredit last week unveiled a 9% stake in Commerzbank, with Orcel subsequently saying in a Bloomberg TV interview that a full takeover of the German lender is an option. He also said he may end up selling the holding if the economics of the deal don’t pan out.
The Italian newspaper Messaggero first reported on UniCredit’s plan to file the application to the ECB. UniCredit declined to comment on the matter. The ECB didn’t immediately respond to a request for comment.
The filing is part of the bank’s announcement last week of its intention to request the regulator to exceed the 10% threshold, the person said.
“UniCredit will submit regulatory filings for authorization to potentially exceed 9.9% of Commerzbank if and when necessary,” the lender said in a press release when first disclosing its stake. That would provide “flexibility” in UniCredit’s approach to its Commerzbank investment, it said.
The ECB’s supervisory arm has coveted a cross border merger since its 2014 formation, seeing such a deal as proof of the single market for euro-area banks. Supervisors will have to judge the financial merits of UniCredit’s business plan for taking over Commerzbank, as well as whether UniCredit would be a fit owner for the enlarged bank.
“Cross-border mergers have been hoped for by many authorities,” Lagarde said last week. A deal would “satisfy many of those who have expected cross-border mergers to result” from efforts to integrate Europe’s financial markets such as the banking union, Lagarde said.
--With assistance from Laura Noonan.
(Updates with further context from third paragraph)
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