Italy’s UniCredit moved to buy another big chunk of Commerzbank, shrugging off German opposition to a possible takeover and upping the ante in its attempt to create a European banking champion with nearly $1.

Things hit fever pitch on Monday after Italy’s UniCredit, led by veteran dealmaker Andrea Orcel, announced out of the blue that it had entered into derivatives transactions that would raise its stake in Germany’s second-largest bank to 21 percent, making it the largest shareholder.

German Chancellor Olaf Scholz issued a sharp warning to UniCredit to refrain from "unfriendly" acts Monday after the Italian bank revealed it had significantly increased its stake in Germany's Commerzbank.

If the deal wins approval, it will make the Italian bank Commerzbank's largest shareholder - to the dismay of the German government.

Italian government officials are growing frustrated at Germany’s opposition to a potential takeover of Commerzbank AG by Milan-based UniCredit Spa, threatening to disrupt the delicate diplomatic relations between Berlin and Rome.

UniCredit is "doing well" to act within the European Union's internal market, Italian Foreign Minister Antonio Tajani told the Class CNBC network on Monday, commenting on the Milan-based bank interest for Germany's Commerzbank.

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.