Green Light from Regulators Paves Way for Takeover

Unicredit has secured crucial approvals from both the European Central Bank (ECB) and the Bank of Italy,removing a notable obstacle in it’s pursuit of acquiring direct control of Bank BPM,and indirectly,other entities within the Banco BPM Group,including Anima group. This pivotal development, detailed in a recent statement, marks the final regulatory clearance needed before the Italian securities regulator, consob, can finalize its review of the offer document, which was initially submitted on december 13, 2024.consob’s approval is anticipated next week.

Strategic Moves and capital Increase on the Horizon

Following a resolution passed at the Extraordinary Assembly on March 27th, Unicredit’s Board of Directors is scheduled to convene on March 30th.The purpose of this meeting is to activate the delegated capital increase, a financial maneuver specifically designed to support the offer extended to Banco BPM. Unicredit remains vigilant, carefully assessing recent developments, notably those concerning the ongoing offer for Anima, and the implications of the Danish Compromise, as outlined in their press release dated March 27, 2025.All previously established conditions for the suspension of the offer remain in effect.

Timeline and potential Government Intervention

According to reports from Ansa, the Public Purchase Offer (OPS) is projected to commence around mid-April and conclude in the second week of June. Concurrently, the Italian government’s stance on the matter, specifically concerning its Golden Power—the government’s special powers to protect assets deemed of national strategic interest—is expected towards the end of April. This power allows the government to intervene in corporate decisions concerning strategic assets.

Anima Takeover and the Danish Compromise Controversy

In the near term,the focus shifts to the Public Acquisition Offer (OPA) for Anima,slated for Friday,april 4th. Andrea Orcel, Unicredit’s CEO, has been closely monitoring this operation, particularly its implications regarding the application, or lack thereof, of the Danish Compromise. This situation has become increasingly tense after the ECB denied BPM the Danish discount on capital requirements. This denial was followed by a statement from the Italian banking Association (ABI) indicating its inability to express an opinion on the matter.

The Danish Compromise refers to a specific regulatory treatment related to capital requirements for banks, perhaps offering more favorable terms. Its denial by the ECB has significant implications for the financial viability and attractiveness of the proposed acquisition.

Market Context and Potential Impact

The potential acquisition of Bank BPM by Unicredit is a significant event in the European banking sector. Such consolidation could lead to increased efficiency and competitiveness, but also raises concerns about market concentration and potential job losses. The outcome of this deal will likely have a ripple effect across the Italian and European financial landscapes.

Currently, the European banking sector is undergoing a period of consolidation, driven by factors such as low interest rates, increased regulatory burdens, and the need to invest in technology. Mergers and acquisitions are seen as a way to achieve economies of scale and improve profitability.

Strategic Direction Under Scrutiny

Banco BPM’s reaffirmed commitment to its strategic direction, supported by a shareholder vote, has triggered unease from UniCredit. Despite BPM’s insistence that its chosen path, particularly concerning its asset management arm (SGR), remains vital, UniCredit has voiced apprehensions about potential adverse effects on BPM’s capital reserves.

UniCredit’s reservations: A Closer Look

UniCredit suggests that banco BPM’s strategic decisions could negatively impact its capital and, consequently, diminish its capacity to extend credit to the real economy.This concern highlights the delicate balance financial institutions must maintain between strategic initiatives and their core lending functions. According to recent data from the European Central Bank, lending to non-financial corporations in the Eurozone has seen a slight contraction in the last quarter, making the lending capacity of banks like Banco BPM even more critical for economic stability.

Banco BPM Responds Firmly

Giuseppe Castagna, CEO of Banco BPM, has refuted UniCredit’s concerns. He asserted that Banco BPM possesses adequate asset levels, even without the ‘compromise’ per soul, sufficient to support planned dividend increases. Castagna also reaffirmed the bank’s unwavering commitment to financing the italian economy, a pledge he says they have consistently upheld in recent years.

I am therefore happy to be able to reassure those who seem to worry about our ability to make credit to support the economy after in the last two years, in his home, he has reduced uses to companies of about 20 billion

Giuseppe Castagna, CEO of Banco BPM

castagna’s pointed remark subtly criticized UniCredit’s lending practices, implying a recent reduction in their corporate lending activities within Italy. This adds a layer of competitive tension to the ongoing debate.

The Future of Banco BPM: Awaiting Key Decisions

As Banco BPM awaits the conclusion of its own share buyback programme, which also involves Poste italiane, the situation remains fluid. The CEO of UniCredit has repeatedly stated that any potential operation with Banco BPM must continue to create value. Should this no longer be the case, UniCredit could withdraw from the arrangement. This highlights the conditional nature of UniCredit’s interest and the potential for significant shifts in the Italian banking landscape.

Implications for the Italian Banking Sector

The ongoing dialogue between UniCredit and Banco BPM underscores the strategic complexities and competitive dynamics within the italian banking sector. The outcome of Banco BPM’s strategic choices and unicredit’s potential involvement will likely have far-reaching implications for the availability of credit and the overall health of the Italian economy. Industry analysts are closely monitoring these developments, recognizing their potential to reshape the competitive landscape and influence future consolidation trends.