Italian bank’s bid for rival would create major European lender

Italy’s UniCredit has launched a €10.1 billion takeover bid for rival Banco BPM, as chief executive Andrea Orcel steps up his efforts to consolidate Europe’s fragmented banking industry.
UniCredit said on Monday that its all-stock offer valued each Banco BPM share at €6.66 and the deal, if agreed, would create Europe’s third-largest lender by market capitalisation.
The offer opens a new front for Mr Orcel’s ambition to create a European banking champion. UniCredit shook the sector this year by revealing that it had amassed a stake in Commerzbank, Germany’s second-biggest lender.
Setting out the reasons for buying BPM, Mr Orcel said it would “broaden our geographic reach, expand our client base across both retail and corporate clients, and further grow our premium businesses”, adding that it would cement UniCredit’s status as Italy’s second-biggest bank.
“The Italian banking sector, which is one of our two biggest markets, is potentially consolidating … We cannot remain absent from that move,” Orcel told analysts on a call on Monday.
BPM has a strong base of retail customers and is the largest operator in Italy’s wealthy northern regions, including Lombardy.
“We are ready to move quickly in our home market, we were ready and we are ready,” Mr Orcel said. If the transaction were to go to plan it would close by early June 2025, he said.
Mr Orcel insisted that the BPM offer did not have any implications for its investment in Commerzbank. “The situation there is very different,” he said.
The German bank’s management has so far dismissed UniCredit’s approach.
Mr Orcel told analysts the Commerzbank stake was “an investment for now, we can sit on it for a while. It will remain there. It’s not diverting management, it’s not requiring from us anything … we are hoping that our presence will prompt Commerzbank to unlock a lot of the value that we know they have, faster.”
He said that “given the reception we have had in certain places, we need to be patient”. He said in a message published on the bank’s website on Monday that UniCredit “may either seek to go further if the conditions are right or to exit our investment and return the capital”.
That decision would take time because “I think it is important to respect the electoral process in Germany”, he said in the message. Germany is set to hold a snap general election in February.
UniCredit would already have integrated BPM by the time it closed any deal for Commerzbank, if such a deal were ever to materialise, he told analysts, adding: “We’re never going to integrate two banks at the same time.”
BPM shares climbed 5 per cent in early trading in Milan while UniCredit dropped 2.9 per cent. Commerzbank shares were down 6 per cent in Frankfurt.
Talk of consolidation among Europe’s banks has begun to pick up in recent months, with policymakers in the region keen to encourage the emergence of larger domestic groups and multinational banks that can challenge US companies and fast-growing rivals in Asia.
UniCredit’s offer represents a 0.5 per cent premium to Friday’s price but a premium of 14.6 per cent to the share price on November 6th, the date on which BPM made an offer to buy asset manager Anima Holding for €1.6 billion.
Days later, BPM took a 5 per cent stake in Monte dei Paschi di Siena (MPS) when Italy’s government offloaded part of its shareholding in the once-ailing lender, kick-starting a domestic consolidation process.
UniCredit said BPM “does not currently have the adequate scale to operate in a context of big change and evolution”.
BPM did not have an immediate comment.
Mr Orcel first attempted to take over BPM two years ago but the deal was derailed by a leak that pushed up the share price. He told analysts that UniCredit’s interest in BPM would not come as a surprise. “It has been something that this bank has on and off looked at for tens of years.”
In 2021 UniCredit walked away from a potential deal with the Italian government to take over MPS. Mr Orcel said UniCredit now had “no ambition on MPS”.
Italian government officials had previously voiced hopes that BPM could spur domestic consolidation, potentially merging with MPS and BPER, to compete with UniCredit and Intesa Sanpaolo, the country’s largest bank.
Mr Orcel made his name advising on bank mergers and acquisitions, including the €21 billion merger of Italy’s Credito Italiano with UniCredito to create UniCredit. He also advised on Royal Bank of Scotland’s disastrous acquisition of ABN Amro in 2007.
UniCredit built its Commerzbank position by buying a chunk of shares from the German government and adding to that using derivatives. – Copyright The Financial Times Limited 2024