The European Central Bank (ECB) has authorized UniCredit to increase its stake in Commerzbank to up to 29.9%. This approval is a key development in UniCredit's potential acquisition of the German lender, although further regulatory clearances, including from Germany's Federal Cartel Office, are still required. UniCredit currently holds approximately 28% of Commerzbank, with 9.5% as a direct stake and 18.5% held through derivatives that can be converted into shares upon regulatory approval. The Italian bank has emphasized its financial strength and compliance with regulatory standards, which were crucial in obtaining the ECB's approval. Despite the approval, Commerzbank and German officials, including Chancellor Friedrich Merz, have expressed opposition to the potential takeover, citing concerns about the bank's independence and its role in financing Germany's small and medium-sized enterprises. Berlin, which holds a 12% stake in Commerzbank, has reiterated its stance against hostile takeovers in the banking sector. UniCredit has stated that it intends to engage in constructive dialogue with the German government before making further decisions. UniCredit CEO Andrea Orcel has indicated that a decision on whether to pursue a full takeover will likely extend beyond 2025. The bank has also noted recent job cuts at Commerzbank and its 2024 profit of €2.62 billion, as well as a significant rise in its share price, which it attributes partly to UniCredit's investment.