UniCredit Withdraws Banco BPM Bid Amid Regulatory Stalemate
Italian Banking Giant Cites Unresolved “Golden Power” Barriers
UniCredit’s pursuit of Banco BPM has collapsed, with the banking behemoth officially retracting its public offer. The move, which saw Banco BPM shares dip over 2%, signals a significant setback for potential consolidation within Italy’s financial sector.
Regulatory Roadblocks Halt Acquisition
The voluntary public offer for all ordinary shares of Banco BPM was withdrawn by UniCredit following an inability to overcome regulatory hurdles tied to Italy’s “Golden Power” legislation. UniCredit stated it did not secure the necessary authorization, a condition it refused to waive.
According to UniCredit, Banco BPM’s insistence on invoking “Golden Power” provisions prevented direct communication with Banco BPM shareholders. This lack of dialogue hampered UniCredit’s ability to assess the proposed merger’s value or negotiate terms.
“The UniCredit-Banco BPM Union would have added a huge value for all interested parties. The derailed offer process and the continuous uncertainty have made this situation unsustainable.”
—Pietro Carlo Padoan, President, UniCredit
Concerns Over Shareholder Engagement
UniCredit highlighted ongoing discussions with the Regional Administrative Court, the European Commission’s Directorate-General for Competition, and the Italian Government. However, the timeline for resolving the “Golden Power” issue extended beyond the offer’s deadline and a suspension period announced by Consob.
“The continuous uncertainty about the application of Golden Power prescriptions does not benefit any.”
—Andrea Orcel, Chief Executive Officer, UniCredit
UniCredit emphasized that the withdrawal was a protective measure for its own shareholders. Andrea Orcel reiterated that the uncertainty surrounding “Golden Power” negatively impacted all parties involved.
Focus Shifts Back to Core Strategy
While reaffirming its general support for industry consolidation in Italy and Europe, UniCredit stressed that mergers and acquisitions remain secondary to its core strategic objectives. The bank’s primary focus is the successful execution of its ongoing transformation program, which is reportedly exceeding expectations.
The offer, initially extended non-discriminatorily to all ordinary shareholders of Banco BPM, faced insurmountable legal restrictions due to the “Golden Power” provisions. Banco BPM shares are listed on Euronext Milan.
This failed acquisition attempt contrasts with other successful banking mergers, such as the 2019 merger of BBVA and Sabadell, which aimed to create a stronger Spanish banking entity. Despite the setback, UniCredit remains committed to its strategic transformation, prioritizing shareholder value and operational efficiency.