Italy in favour of UniCredit-Commerzbank deal as long as HQ stays in Italy
Repeats Wednesday story with no changes to text
By Giuseppe Fonte
ROME, Sept 18 (Reuters) -Italy's government sees favourably UniCredit's CRFDI.MI efforts to build a large European banking group through a merger with Germany's Commerzbank CBKG.DE as long as the Milanese bank keeps its central functions in Italy, sources close to the matter said.
Italy's Treasury declined to comment, while UniCredit was not available for comment.
UniCredit has emerged as the single largest private investor in Commerzbank after spending 1.5 billion euros ($1.7 billion) to buy 9% of the German rival.
Italy's second-biggestbank will seek supervisory approval to potentially acquire up to 30% of Commerzbank, sources told Reuters on Wednesday, as it said it would explore a possible merger among other "value creating opportunities".
Rome's government has so far kept its distance from the move.
Speaking on condition of anonymity because the matter is sensitive, the sources told Reuters the government was not against UniCredit's move provided it did not entail a shift of central functions to Germany were a merger to take place.
Other people added Rome in general regarded Orcel's moves with caution as relations have been strained since UniCredit walked away from buying domestic rival Monte dei Paschi di Siena BMPS.MI at the eleventh hour in 2021, forcing the government to seek more time from the EU to return the bank to private investors.
UniCredit in 2005 bought Bavarian bank HVB. Albeit smaller in size than Commerzbank's, UniCredit's German business is more efficient and more profitable, providing scope for cost savings and a profit boost were the two entities to combine.
A previous attempt by former UniCredit CEO Jean Pierre Mustier to move on Commerzbank met with political opposition in Italy due to plans to create a German holding company to lead the bank's business.
Italian politicians have traditionally looked with concern at cross-border mergers of their lenders due to the role they play in helping the Treasury to refinance the country’s nearly 3 trillion euro ($3.3 trillion) public debt.
Conversely, Italy's debt running at around 140% of gross domestic product has long raised worries in Germany.
European bankers have long complained that politics and regulation hindered cross-border mergers, leaving the bloc’s lenders to trail far behind their U.S. rivals in terms of size and market value.
($1 = 0.8989 euros)
Editing by Valentina Za and Nick Zieminski
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
