UniCredit, one of the main Italian banks, has once again shaken the European financial table with the launch of a takeover bid for all the shares of its national rival, BPM, which is the third largest bank in Italy by volume of assets. With this move, which was announced at the end of November, and which was formally presented to the Italian stock market regulator, CONSOB, in mid-December, the entity led by Andrea Orcel offers the shareholders of its rival to exchange the shares of BPM for UniCredit securities with an exchange ratio slightly above six shares for one, which implies a meager premium of 0.5% over the bank's market value. The operation is valued at 10.1 billion euros and has great significance for the Italian and European banking sector. UniCredit currently has a market capitalization of almost 58.5 billion euros and the acquisition of BPM would create the largest banking group in Italy, surpassing the giant Intesa Sanpaolo, and the third in Europe by market capitalization, being able to overtake the Spanish Banco Santander, which has a stock market value of 66,950 million euros. “Europe needs stronger and larger banks to help it develop its economy and compete with other large banks.” economic blocks; Thanks to the work carried out in the last three years, UniCredit is now well positioned to also face this challenge,” said Orcel when announcing the takeover bid. The Italian banker, who was on the verge of becoming CEO of Santander, is emerging as the great agitator of the continental financial board. UniCredit's offer is part of the trend of creating increasingly larger groups to compete in international financial markets. The continuous movement of acquisitions and mergers among banks is part of a long and complex process that has practically become a battle for survival that affects the entire European continent. In Italy, this phenomenon is known as “Risk's departure of the banks”: either they conquer or they are conquered. Experts believe that the resulting group could have more capacity to compete with its rivals, both domestic and foreign. “We will find an Italian banking system with larger and more competitive players,” highlights Professor Stefano Caselli, finance expert and dean of the Business School at Bocconi University in Milan. He also emphasizes that in the current panorama «Europe needs larger banks, even through transnational mergers, to compete with the United States and China.» The problem for the creation of these European giants is twofold: on the one hand, the resistance of the Member States to give up sovereignty in a sector as sensitive as the financial sector; and, on the other, the absence of a true European banking union. These obstacles are being verified by UniCredit itself on the other front it has open: the assault to control the German Commerzbank. But returning to its internal movement, UniCredit defends the advantages of the acquisition for both parties. On the one hand, it would allow BPM to have a size that would make it more competitive and UniCredit to have an extensive network of branches. Banco BPM emerged from the former cooperative bank Banca Popolare di Milano and its strength is in territorial finance. According to local media, with the acquisition, UniCredit would acquire more than a thousand new branches in the prosperous north of Italy, doubling its market share in this area of the country, reaching 20%. Furthermore, on a national scale it would go from having 14% of all deposits, compared to the current 9%. The operation, which UniCredit intends to complete in the middle of next year, would produce important synergies and would generate, according to its estimates, cost reductions by value of 900 million euros per year and 300 million annual increase in income. Analysts have reacted to the news with caution. On the one hand, there are those who see a way to strengthen UniCredit's position in the market and, on the other, those who remember that bank mergers in Italy often face significant regulatory and social challenges. Bank of America analysts, for example , speak of a “profitable” operation and consider that the synergies projected by UniCredit at this time are “credible” and could even be greater. Some reports from Deutsche Bank or Intermonte consider that UniCredit should increase its offer, approximately by 3 billion euros, taking into account BPM's growth prospects, if it wants to win the favor of this entity's shareholders. Shortly after it was announced The takeover bid, a member of the BPM board of directors, Mauro Paoloni, described it as “hostile.” The entity's leadership reiterated after an internal meeting that UniCredit's offer “has not been requested” and noted that “it does not reflect the profitability and the potential for creating additional value for Banco BPM shareholders.” Orcel considers that the offer It is “convenient.” However, some media such as Il Corriere della Sera indicate that the executive is open to a possible improvement in the offer, depending on this year's results from BPM, which will be known in February. UniCredit's intentions have met with rejection from part of the Italian coalition government. Matteo Salvini's League, which holds the Economy portfolio, is even studying whether to exercise its veto power, although in this case it would be difficult to apply it. The conservatives of Forza Italia support the acquisition and Meloni's far-right Brothers of Italy remains neutral.
Government misgivings
The controversy arises from the role that BPM could play in the acquisition of the Monte dei Paschi di Siena (MPS) bank, rescued with public funds and which remains largely owned by the State. For years, different governments have been trying to find a buyer, without success. In the last sale of MPS shares, Banco BPM bought 5%, so there was speculation about its possible interest in acquiring the entire entity. Although there is nothing concrete or official about it, the Italian Executive fears that the acquisition by UniCredit could nip any operation with MPS in the bud. Orcel has assured that he has “no ambitions” for Monte dei Paschi di Siena. Meanwhile, the French bank Crédit Agricole, which is a shareholder in BPM, has announced its intention to increase its stake in the Italian entity, from 9.9% to 15%. Analysts are still not clear what effect this operation will have on UniCredit's plans. UniCredit's bid for BPM has raised some surprise in the sector, since the Italian entity is also studying the acquisition of the German bank Commerzbank. Last September, UniCredit acquired nearly 9% of the German entity, and in mid-December it revealed that its total position amounted to 28%, of which 9.5% is directly and the rest through derivatives. . Orcel has made it clear that the operation on BPM is “autonomous and independent” of the investment made by UniCredit in Commerzbank, which is currently paralyzed, awaiting the result of the next February elections in Germany. “UniCredit wants to become one of the large European banks and has made a very ambitious move, it is correct that this is the case,” Caselli assesses.