UniCredit’s high-profile pursuit of Banco BPM has reached a critical juncture, as CEO Andrea Orcel publicly downplayed the likelihood of a successful takeover, estimating the chances at no more than 20%.
This stark assessment reflects mounting regulatory, legal, and political obstacles that have cast uncertainty over what was once seen as a transformative deal for Italy’s banking sector.
The proposed acquisition, valued at approximately €10.1 billion in an all-share exchange, was designed to cement UniCredit’s leadership in Italian banking and deliver substantial cost and revenue synergies. However, the transaction has faced resistance from multiple fronts.
To address concerns from the European Commission, UniCredit has offered to divest 206 branches, primarily in northern and northeastern Italy, a move expected to secure EU antitrust approval by June 19. The divestment is a strategic concession aimed at alleviating competition worries while still enabling UniCredit to expand its geographic footprint.
Yet, the most formidable challenges have come from the Italian government, which invoked its “golden powers” to impose stringent conditions on the deal. These include maintaining Banco BPM’s loan-to-deposit ratio for five years and prohibiting reductions in investments linked to Anima Holding, an asset manager recently acquired by Banco BPM.
UniCredit has contested these requirements, arguing they would undermine the financial rationale of the merger and could constrain operational flexibility for years to come. A court hearing set for July 9 is expected to determine whether these government-imposed terms will stand.
Despite strong financial performances from both banks—UniCredit reported a record €2.8 billion net profit in the first quarter of 2025, while Banco BPM’s net income surged 38% to €511 million—the regulatory impasse has dampened investor enthusiasm. Participation in UniCredit’s tender offer for Banco BPM remains minimal, signaling skepticism about the deal’s completion.
With the court decision looming and regulatory approvals still pending, CEO Orcel’s candid outlook underscores the precariousness of the situation. For now, the fate of Italy’s largest domestic banking merger hangs in the balance, with the market closely watching for any sign of resolution in the coming weeks.
