Germany’s finance minister has urged UniCredit CEO Andrea Orcel to maintain Commerzbank’s headquarters and listing in Frankfurt as the Italian lender advances its planned acquisition of the German bank. In the first direct discussions between Berlin and UniCredit regarding the takeover bid, Finance Minister Lars Klingbeil emphasized the need to protect the interests of Commerzbank’s approximately 40,000 employees.

Klingbeil also stressed the importance of preserving the bank’s role in financing Germany’s small and medium-sized enterprises, known as the Mittelstand, a key pillar of the country’s economy. According to the finance ministry, Klingbeil said after the meeting that the government expects Commerzbank to remain publicly listed with its headquarters in Frankfurt and to sustain its strong Mittelstand business both domestically and internationally.

The meeting signals a shift in the German government’s stance toward the takeover. Berlin, which currently holds close to a 13 percent stake in Commerzbank, has moved away from outright opposition to imposing conditions on UniCredit should it secure control of the German lender.

UniCredit increased its stake in Commerzbank to 47.6 percent in July after inviting shareholders to sell their shares, narrowing but not reaching the 50 percent threshold required for formal majority ownership. Analysts have noted, however, that UniCredit might still exercise effective control with its current holding.

Despite this progress, UniCredit faces ongoing challenges from both the German government and Commerzbank’s powerful trade unions. Berlin had previously criticized UniCredit for what it described as “hostile tactics” employed during its acquisition attempts.

Commerzbank declined to provide a comment on the recent developments.