UniCredit (BIT:CRDI) has launched a surprise €10.5bn all-share bid for its domestic rival Banco BPM (BIT:BAMI), sparking political backlash and concerns about the impact on Italy's broader banking strategy. The move could disrupt government plans to consolidate Banco BPM with the state-owned Monte dei Paschi di Siena (MPS), creating a third major player in Italy's banking sector alongside Intesa Sanpaolo and UniCredit itself.
UniCredit is Italy's second-largest bank, with a strong presence across Europe, offering retail, corporate, and investment banking services. Banco BPM is Italy’s third-largest lender, with deep roots in the country’s northern regions, particularly Lombardy, and a focus on retail banking and asset management.
The bid, announced on Monday, values Banco BPM shares at €6.657 each—just a 0.5% premium to their last closing price. UniCredit CEO Andrea Orcel has positioned the offer as a response to growing consolidation within the Italian banking sector, following Banco BPM’s recent moves to acquire a 5% stake in MPS and bid for asset manager Anima Holding.
Italy’s Economy Minister Giancarlo Giorgetti warned that the government might invoke its “golden powers” to shield strategic assets, describing UniCredit's bid as "communicated but not agreed with the government". Giorgetti's comments, coupled with Deputy Prime Minister Matteo Salvini's criticism, highlight the political tensions surrounding the deal. Salvini expressed skepticism over UniCredit’s change in strategy, stating, "I thought UniCredit wanted to grow in Germany. I don't know why it changed its mind."
Orcel emphasized that the proposed merger would generate €1.2bn in annual synergies, including €900m in cost savings and €300m in revenue growth, while also strengthening UniCredit’s presence in Italy’s affluent Lombardy region. He defended the timing of the offer, stating, “We cannot remain absent from [Italian banking consolidation].” Despite political and regulatory challenges, Orcel reassured investors that the deal aligns with UniCredit’s financial goals, including maintaining a CET1 capital ratio above 13% and continuing dividend payouts.
UniCredit’s bid for Banco BPM comes as the bank builds its stake in Germany's Commerzbank (ETR:CBKG), a contentious move facing resistance from Berlin. Orcel insisted that the Banco BPM acquisition would not affect UniCredit’s strategy in Germany, but analysts have raised concerns about the feasibility of managing two significant transactions simultaneously.
The offer must secure approval from Banco BPM’s board, the European Central Bank, and antitrust regulators, with UniCredit aiming to complete the merger by mid-2025. However, political tensions, regulatory scrutiny, and competing interests may pose significant hurdles to the deal’s success.
Shares in Banco BPM rose 5.5% following the announcement, while UniCredit’s stock fell 4.8%, reflecting mixed investor sentiment about the proposed merger and its broader implications.
