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Italy’s UniCredit has launched a €10.1bn takeover bid for its rival Banco BPM, in a deal that would step up consolidation of Europe’s fragmented banking sector.
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.
It comes months after UniCredit, led by dealmaker Andrea Orcel, shook European finance by revealing it had amassed a stake in Commerzbank, Germany’s second-biggest lender.
Orcel said in a statement that a deal for BPM 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.
He said the offer for BPM “does not have any implications” for its investment in Commerzbank. The German bank’s management has so far dismissed UniCredit’s approach.
“The situation there is very different,” Orcel said. He said, in relation to its Commerzbank stake, 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. Germany is set to hold a snap general election in February.
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 giants 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 premium to the share price on November 6, the date on which Banco BPM made an offer to buy asset manager Anima Holding for €1.6bn.
Days later BPM also took a 5 per cent stake in Monte dei Paschi di Siena when Italy’s government offloaded part of its shareholding in the once-ailing lender, kick-starting a domestic consolidation process.
UniCredit said that BPM “does not currently have the adequate scale to operate in a context of major change and evolution”.
BPM declined to comment.
Orcel made his name advising on bank M&A, including the €21bn 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.