UniCredit, Italy's second-largest bank, formally withdrew its approximately €15 billion takeover bid for smaller rival Banco BPM on Tuesday, citing significant government interference. The decision comes after months of regulatory hurdles and legal challenges stemming from the Italian government's use of its "golden power" rules. As Bloomberg Opinion noted in a tweet, "UniCredit has abandoned its takeover bid for BPM because of government interference."
UniCredit CEO Andrea Orcel had initially launched the unsolicited all-share offer in November, aiming to drive consolidation within the Italian banking sector. Banco BPM's board had previously rejected the bid, asserting that it undervalued the bank and would penalize its shareholders in the combined entity.
The Italian government subsequently invoked its "golden power" provisions, a mechanism designed to protect strategic national interests, imposing several conditions on the potential acquisition. These conditions included demands regarding UniCredit's operations in Russia and requirements to maintain specific loan-to-deposit ratios for Banco BPM, complicating the deal's progression.
The imposed conditions led to regulatory uncertainty and legal disputes. While a Lazio regional administrative court partially annulled some of the government's demands, a critical requirement for UniCredit to cease most of its operations in Russia remained. The European Commission also expressed concerns regarding Rome's intervention, adding to the regulatory complexity.
UniCredit stated that the "golden power" clause, which it claimed was "insistently invoked by BPM's top management," prevented it from engaging directly with Banco BPM shareholders. CEO Orcel emphasized that the prolonged uncertainty and the inability to properly assess the deal's value made it impossible to proceed with the offer.
Following the withdrawal of the bid, Banco BPM's shares experienced a decline. Conversely, UniCredit reported a higher-than-expected quarterly profit and subsequently raised its 2025 outlook, with Orcel indicating a focus on core operations. This development underscores the ongoing tension between banking consolidation ambitions and national regulatory oversight within the European financial landscape.