UniCredit SpA Chief Executive Officer Andrea Orcel moved to more than double the lender’s stake in Commerzbank AG, in a dramatic development that’s likely to escalate tensions with the German government.

UniCredit stunned markets by buying a 9% stake in Germany's second-largest lender. As Commerzbank's management now tries to fend off a possible takeover, DW explores the next possible moves.

This summer, the German government appeared ready to finally reduce its stake in Commerzbank AG. It was a moment Andrea Orcel, chief executive officer of UniCredit SpA, had also been anticipating. Most Read from BloombergHow Americans Voted Their Way Into a Housing CrisisAfter a Record Hot Summer,

Italy's UniCredit has announced a significant increase in its stake in Germany's Commerzbank, moving its holding to nearly 21% and applying to increase its ownership to as much as 29.9%. This bold move by UniCredit comes at a time when European banks are under pressure to consolidate and compete more effectively on the global stage.

UniCredit on Monday said it’s reached an agreement to further increase its stake in Commerzbank as the German government increasingly attempts to ward off an Italian acquisition of its number-two bank.

UniCredit announced it had increased its stake in German lender Commerzbank to 21% and submitted a request to boost the holding to up to 29.9%.

Italian bank UniCredit (OTCPK:UNCFF) (OTCPK:UNCRY) said Monday it increased its stake in Commerzbank (OTCPK:CRZBF) (OTCPK:CRZBY) to around 21% through financial instruments and submitted an application to own up to 29.