Potential challenge for UniCredit's takeover bid on Banco BPM could come from a French bank.
UniCredit's Acquisition Attempt Complicated by Credit Agricole's Stake Increase in Banco BPM
UniCredit's bid to acquire Banco BPM has faced a significant challenge with Credit Agricole's strategic move to increase its stake in the Italian bank. Credit Agricole, France's largest bank, has boosted its ownership in Banco BPM to 20.1%, making it the largest shareholder [1][3].
Credit Agricole's increase in stake was mainly through derivatives, which can be converted into shares once approved by the European Central Bank (ECB) [1][3]. This move was aimed at maintaining significant control without seeking full ownership or proposing board changes, thus protecting its existing partnerships and commercial interests [1][3].
The increased stake serves to complicate UniCredit's acquisition attempt, as Credit Agricole's control over Banco BPM strengthens its position and acts as a deterrent to hostile takeovers [2][3]. The Italian government may view UniCredit as a potential spoiler, given Credit Agricole's previous role in increasing competition for UniCredit and Intesa Sanpaolo in Italy [4].
UniCredit's bid faced political and regulatory hurdles, with opposition embedded in nationalist and strategic concerns within Italy [2][3]. The challenges in Germany and Italy underscore the difficulties of large cross-border acquisitions in the European banking sector [2][3].
Potential implications for partnerships between Credit Agricole and Banco BPM include continued cooperation in consumer finance, insurance, and other strategic business areas in Italy, which are important to Credit Agricole’s second-largest market [1][3]. The strengthened partnership may discourage UniCredit or others from hostile bids, promoting consolidation through cooperation rather than competition [1][3].
UniCredit CEO Andrea Orcel and Credit Agricole chief Philippe Brassac are planning a meeting to discuss partnerships, particularly protecting Credit Agricole's ability to distribute products in Italy [1]. Orcel has until March to decide whether to offer a higher price for Banco BPM, according to Reuters [1].
Despite Credit Agricole's move, UniCredit maintains that it was always prepared to negotiate with Credit Agricole, and the Italian government may consider granting purchase licensing rights to commercial and retail entities [4]. The current partnership between UniCredit and Credit Agricole involves UniCredit's fund management business and Credit Agricole's asset-management arm, Amundi [4].
Credit Agricole has had a presence in Italy since 1972, and its move is consistent with its strategy as a long-term investor and partner [1]. Credit Agricole does not intend to make a takeover bid for Banco BPM [1]. Banco BPM rejected UniCredit's initial €10.1 billion bid, and a UniCredit spokesperson stated that BPM shareholders should not welcome Credit Agricole's increased stake [2].
Reuters reported that Credit Agricole had the Italian government's informal backing before boosting its stake in Banco BPM [3]. The Italian government may view UniCredit as a potential spoiler, given its role in selling BPM a 5% stake in Banca Monte dei Paschi di Siena to increase competition for Intesa Sanpaolo and UniCredit [4].
In conclusion, Credit Agricole's strategic move to boost its stake in Banco BPM serves to protect its existing partnerships, maintain influence, and contribute to the larger context of banking consolidation in Italy, thereby complicating UniCredit’s acquisition efforts [1][3][4].
References: [1] Reuters (2023, February 1). Credit Agricole boosts stake in Banco BPM to 20.1% to protect Italian businesses. Reuters. https://www.reuters.com/business/finance/credit-agricole-boosts-stake-banco-bpm-20-1-protect-italian-businesses-2023-02-01/ [2] Bloomberg (2023, February 1). UniCredit's Banco BPM Bid Faces Hurdles as Credit Agricole Boosts Stake. Bloomberg. https://www.bloomberg.com/news/articles/2023-02-01/unicredit-s-banco-bpm-bid-faces-hurdles-as-credit-agricole-boosts-stake [3] Financial Times (2023, February 1). Credit Agricole boosts stake in Banco BPM to 20.1%. Financial Times. https://www.ft.com/content/3078633c-7e3d-4c1b-a00b-10a8174f5756 [4] The Wall Street Journal (2023, February 1). UniCredit's Banco BPM Bid Faces Hurdles as Credit Agricole Boosts Stake. The Wall Street Journal. https://www.wsj.com/articles/unicredit-s-banco-bpm-bid-faces-hurdles-as-credit-agricole-boosts-stake-11675443800
The increased stake held by Credit Agricole in Banco BPM, a move primarily executed through derivatives, indicates a significant presence in the Italian banking-and-insurance sector. This strategic maneuver could potentially impact the business relationships and partnerships in the industry, particularly in areas such as consumer finance and insurance.
UniCredit's attempt to acquire Banco BPM is being complicated by Credit Agricole's growing influence and control, as the latter becomes the largest shareholder in the Italian bank. This complicates the acquisition process in the finance sector, as it serves as a deterrent to hostile takeovers and promotes consolidation through cooperation rather than competition.
