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.

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,

UniCredit CEO Andrea Orcel stated that a merger with Commerzbank could deliver substantial value for stakeholders, strengthening both banks in the German market. Orcel highlighted potential savings in central

UniCredit SpA Chief Executive Officer Andrea Orcel used Barclays Plc to help quietly build up a stake in Commerzbank AG, a move that has shaken European finance and triggered a backlash from the German government.

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.