Italian lender UniCredit has made a surprise bid worth 10.1 billion euros for its smaller rival Banco BPM, reports Euronews.
The larger lender said it would offer 0.175 of its shares for each Banco BPM share, valuing the stock at 6.657 euros apiece.
The all-share offer is therefore at a premium of 0.5% to the closing price of Banco BPM shares recorded on 22 November.
According to UniCredit's press release, the offer aims to "strengthen the bank's competitive position in Italy by generating significant long-term value for all stakeholders and for Italy".
UniCredit added that the potential deal would "further strengthen its role as a leading pan-European bank".
A successful merger would make the new entity the third largest lender in Europe by market capitalisation.
Andrea Orcel, who has led UniCredit since 2021, said the potential takeover of Banco BPM would have no implications for his investment in Commerzbank.
The Italian lender is increasing its stake in the German bank, a move that is meeting stiff resistance from Berlin.
Many in Germany fear the merger could lead to job cuts and make it harder to lend to small and medium-sized businesses.
In late September, German Chancellor Olaf Scholz commented that "hostile attacks, hostile takeovers are not a good thing for banks".
The announcement also comes after Banco BPM this month bought a 5% stake in Italian bank Monte dei Paschi di Siena (MPS), which is seen as a potential prelude to a merger.
The government has been slowly exiting MPS since the 2017 bailout, recently reducing its stake from 26% to around 11%.
Also this month, Banco BPM launched a €1.6bn bid to buy asset manager Anima Holding, seeking to diversify its sources of revenue in the face of falling interest rates.
Mergers in Europe are gathering pace as the region seeks to compete with other economic blocs, an agenda that is likely to require larger lenders. | BGNES
