Exclusive-UniCredit to win unconditional EU nod for Commerzbank deal, sources say

By Foo Yun Chee and Valentina Za

BRUSSELS/ROME, Nov 9 (Reuters) - Italy's UniCredit is set to secure unconditional EU antitrust approval for its acquisition of Germany's second biggest bank Commerzbank, three people with direct knowledge of the matter said.

The European Commission's approval underscores the regulatory push for cross-border financial mergers to create European champions. It will come on the heels of the European Central Bank's green light for the deal last month.

UniCredit CEO Andrea Orcel said on Monday that all the remaining regulatory approvals for UniCredit to take control of Commerzbank would come before the end of November, sooner than anticipated.

The Commission and UniCredit both declined to comment.

The Commission, which is the EU competition enforcer, is due to decide on the deal by November 16.

In a legal review of the takeover process, the EU watchdog initially had some concerns about whether Berlin's demand that the government keep two supervisory board seats at Commerzbank complied with EU laws, two of the people said.

UniCredit has challenged the government's demand and said it wants to appoint all 10 shareholder representatives on Commerzbank's 20-strong supervisory board.

That would leave no room for the two seats the bank has reserved for the government since its 2009 rescue.

The legal issue related to the supervisory board seats is separate from the Commission's merger assessment, but could be important for future deals, the people said.

The German government has cut the Commerzbank stake it acquired in the 2009 bailout to 13.3%.

Berlin had initially listed board representation among core issues for discussions with UniCredit, but over time the focus has shifted to securing safeguards for jobs, small business lending and Commerzbank's Frankfurt headquarters and bourse listing.

Regulators expect the legal issue to be resolved in time for the EU green light in mid-November or, if not, for it to be examined at a later stage, one of the people said.

(Reporting by Foo Yun Chee and Valentina Za; Editing by Susan Fenton)