Italian banking giant UniCredit announced on Wednesday it has raised its stake in German lender Commerzbank to approximately 28%, intensifying speculation about a potential takeover despite resistance from the German government and Commerzbank management.

Expanded Investment Signals Strategic Intent

UniCredit SpA disclosed that its holding in Commerzbank AG grew from 21% to 28% of the voting rights, comprising a 9.5% direct stake in shares and an additional 18.5% held through derivatives.

"This move reinforces UniCredit's view that substantial value exists within Commerzbank that needs to be crystallized," the bank said in a statement. "It reflects the belief in Germany."

The Italian lender emphasized that the expansion aligns with its plans to achieve a 29.9% stake. This increase follows a significant jump in September when UniCredit raised its holdings from 9% to 21%, fueling speculation about a potential full acquisition.

Regulatory Approval in Progress

UniCredit has filed the necessary regulatory documents to secure approval for the increased stake. The European Central Bank (ECB) must authorize the move to ensure compliance with banking system stability requirements. The ECB, which declined to comment on Wednesday, is expected to assess UniCredit's suitability within 90 days of receiving the application.

"The authorization process is now activated, and interactions with authorities [are] ongoing," UniCredit said, highlighting its commitment to meeting regulatory requirements.

Takeover Speculation Sparks Controversy

While UniCredit CEO Andrea Orcel has hinted at a possible partnership between the two banks, he maintained that any deal must serve shareholders, clients, and the broader European banking ecosystem. Orcel acknowledged the importance of benefiting the German economy, where Commerzbank is a pivotal lender for midsized businesses.

Despite these assurances, the German government remains opposed to UniCredit's pursuit. Berlin holds a 12% stake in Commerzbank through its debt management agency, Finanzagentur, and has indicated no intention to divest its shares. The government's resistance aligns with objections from Commerzbank management, which has expressed concerns about foreign ownership.

UniCredit's Broader Ambitions

The Commerzbank investment is not UniCredit's only strategic maneuver. The Italian bank has also been eyeing domestic rival Banco BPM, although the latter has rejected UniCredit’s €10 billion ($10.5 billion) acquisition offers.

As UniCredit strengthens its foothold in Commerzbank, the move raises questions about potential consolidation in Europe’s fragmented banking sector, where national interests often clash with cross-border ambitions.