UniCredit daughter Hypovereinsbank is already the 7th largest bank in Germany and about half the size of Commerzbank. If you exclude government owned banks Hypovereinsbank would be number 5 and Commerzbank 2 largest in Germany by assests. Deutsche Bank would be larger but only slightly. However Deutsche is already too big too fail, as is Unicredit.
This is just a bad idea all around.