A logo on UniCredit SpA's headquarters in Milan, Italy, on Saturday, January 22, 2022.
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On Monday, Italian bank UniCredit offered to take over its local competitor Banco BBM For nearly 10 billion euros ($10.5 billion), in a move it says is separate from its pursuit of a German bank. Commerzbank.
The deal, if completed, would combine two of Italy's largest lenders. UniCredit said in a statement early Monday that it was offering 6,657 euros per share — a slight premium to Friday's closing price of 6,644 euros.
UniCredit said the purchase, which will be an all-stock deal, will allow the bank to “further strengthen its role as a leading pan-European banking group.”
UniCredit shares fell 1.7% on Monday in early trades, while… Banco BBM rose 5%.
This news comes on the heels of a wave of mergers and acquisitions announcements in the European banking sector this year. The industry has been considered ripe for consolidation for years, with cash-rich UniCredit often pointed to as a potential acquirer.
In September, UniCredit Bank increased its stake in German Commerzbank to about 21%, and submitted a request to increase its stake to 29.9%. Earlier that month, the Italian bank acquired a 9% stake in Commerzbank, with half of this shareholding coming from the German government.
The German government has yet to bless the potential union, with Chancellor Olaf Scholz saying that “unfriendly attacks and hostile takeovers are not a good thing for banks,” in late September comments reported by Reuters.
Berlin management, the largest shareholder in Commerzbank, retains a 12% stake after rescuing the bank during the 2008 financial crisis and liquidating 4.5% of its initial position in early September. Commerzbank shares fell 6% on Monday.
“It's definitely a surprise,” Kian Abu Hussein, head of European bank equity research and global IB coverage at JPMorgan, told CNBC's Squawk Box Europe.
“It's unlikely that (UniCredit CEO Andrea Orcel) will be able to do both deals at the same time. This sends a message that Commerzbank may be a little more difficult than originally expected.”
Earlier this month, Banco BPM itself made a bid for asset management firm Anima in a potential €1.6 billion deal, and a few days later bought a 5% stake in state-owned Monte dei Paschi di Siena (MPS).
UniCredit Bank on November 6 reported an 8% year-on-year increase in quarterly net profit to 2.5 billion euros ($2.25 billion), compared with a Reuters forecast of 2.27 billion euros. It also raised its full-year net profit forecast to more than 9 billion euros, from a previous forecast of 8.5 billion euros. Shares are up about 55% so far this year.
Even if Commerzbank and Banco BBM's deals were staggered by, say, nine months, this would still be an unrealistic time frame for the deals, Abu Hussein said.
“You also have to remember, from a regulatory perspective, there is a lot of implementation risk, and the regulator will look at the size of the bank, the operational risks, and the ability of management to merge two banks at the same time,” he said. “So I think he (Orcel) is hedging himself a little bit on these transactions.”
CNBC's April Roach and Roxandra Iordash contributed to this article.
Correction: This story has been updated to reflect the correct spelling of Banco BPM.
