UniCredit has converted derivative holdings into ordinary shares to raise its equity and voting stake in Commerzbank to roughly 20%, securing approvals from the European Central Bank and Germany’s antitrust watchdog. The Italian bank said it intends to convert additional instruments that would take its holding to about 29%, just below the level that would trigger a mandatory takeover bid for the Frankfurt-based lender. The larger position deepens a rift with Berlin, which still owns about 12% of Commerzbank after a crisis-era bailout. A German finance-ministry spokesperson reiterated that the government will not sell its stake and described UniCredit’s approach as “uncoordinated and unfriendly”. Commerzbank’s supervisory board members likewise favour independence, although Federal Cartel Office chief Andreas Mundt said he sees no competition obstacles to a full takeover. At the same time, UniCredit is contesting Italy’s use of special ‘golden-power’ rules that attach strict conditions to its €17 billion bid for Banco BPM. The administrative court in Lazio heard the bank’s appeal on 9 July and is expected to deliver a decision by 16 July. UniCredit argues that requirements to exit Russia within nine months and to preserve BPM’s lending metrics would undermine the combined bank’s management. The European Commission, which has exclusive authority over large cross-border mergers, is in talks with Rome about the decree and could open infringement proceedings if the conditions are not withdrawn. Brussels on 9 July denied reports that it had already issued a formal letter, saying no decision has been taken. Despite the regulatory uncertainty, shares in UniCredit, Commerzbank and Banco BPM all advanced in Milan and Frankfurt trading.