The new efforts of Andrea Orcel, the boss of the Italian banking giant UniCredit, towards further consolidation of the sector are facing a new wave of rejection. While the attempted acquisition of the German bank Commerzbank launched at the end of September and denounced as hostile by Berlin is on hold, the Milanese group is now stumbling against Banco BPM. The operation launched on Monday, November 25 on the third Italian banking group, a public exchange offer worth more than 10 billion euros, is considered by Banco BPM as reflecting neither its profitability nor its potential for value creation. It also aroused frank hostility from part of the Italian government.
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“We are a large autonomous bank, an Italian bank which aims to be close to our regions and to the small and medium-sized businesses which constitute the backbone of our country”declared Wednesday the president and CEO of Banco BPM, Giuseppe Castagna, in a letter intended for his employees and cited by the Bloomberg agency. According to Mr. Castagna, 6,000 of the group's 20,000 employees would be threatened by the restructuring that UniCredit's offer would entail. BPM also judged the conditions of the operation carried out by its rival “absolutely unusual”not having been the subject of prior agreement, and that the merger would cause the bank to lose its legal autonomy while reducing competition on the Italian market.
The turmoil caused by Andrea Orcel's new acquisition attempt confirms UniCredit's fierce appetite for its rivals and the desire of its manager to get straight to the point even if it means suffering the repercussions of a particularly aggressive approach. Arriving at the head of UniCredit in 2021, Mr. Orcel, 61, has a reputation as a virtuoso negotiator. In his previous role at the investment bank Merrill Lynch, he oversaw major mergers in the financial sector, including, in 1998, the one that gave rise to the group he leads today and whose the stock value has increased by 390% since his arrival.
A “foreign bank”
At the end of September, the surprise acquisition of 9% of Commerzbank by UniCredit, then the announcement of an increase to 21% of the capital, was hailed as the most spectacular operation known by European finance since the 2008 financial crisis. The prospect of a merger with UniCredit was also part of the logic of consolidation of the sector on a continental scale called for by the former presidents of the Italian council Mario Draghi and Enrico Letta, authors on behalf of the European Commission, reports on competitiveness and the single market respectively. If the maneuver received the support of the European Central Bank, it aroused clear hostility from the German government. Since then, the operation has been at a standstill.
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