UniCredit makes €10bn propose for Italian rival Banco BPM

Italy’s UniCredit has launched a €10.1bn takeover bid for its rival Banco BPM, in a deal that would step up combining of Europe’s fragmented banking sector.

UniCredit said on Monday that its all-distribute propose valued each Banco BPM distribute at €6.66 and the deal, if agreed, would make Europe’s third-largest lender by economy 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 develop our extra charge businesses”, adding that it would cement UniCredit’s position as Italy’s second-biggest lender.

He said the propose for BPM “does not have any implications” for its property in Commerzbank. The German lender’s management has so far dismissed UniCredit’s way. 

“The circumstance there is very different,” Orcel said. He said, in relation to its Commerzbank stake, that UniCredit “may either seek to leave further if the conditions are correct or to exit our property and profit the capital”.

That selection would receive period because “I ponder it is significant to regard the electoral procedure in Germany”, he said. Germany is set to hold a snap general election in February.

Talk of combining among Europe’s banks has begun to pick up in recent months, with policymakers in the region keen to inspire the emergence of larger domestic groups and multinational banks that can test US giants and quick-growing rivals in Asia.

UniCredit’s propose represents a 0.5 per cent extra charge to Friday’s worth but a extra charge of 14.6 per cent extra charge to the distribute worth on November 6, the date on which Banco BPM made an propose to buy property 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 combining procedure.

UniCredit said that BPM “does not currently have the adequate scale to operate in a context of major transformation and growth”.

BPM declined to comment.

Orcel made his name advising on lender M&A, including the €21bn combination of Italy’s Credito Italiano with UniCredito to make UniCredit. He also advised on Royal lender of Scotland’s disastrous purchase 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.