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Business

ECB's green light to Intesa Sanpaolo's takeover bid for UBI expected by mid-June

Intesa unveiled in February an all-paper exchange offer for UBI to create the euro zone's seventh-largest banking g
29 May 2020
  • Intesa unveiled in February an all-paper exchange offer for UBI to create the euro zone's seventh-largest banking group and drive profits.
  • Italy's antitrust body is expected to wrap up its probe only at the end of July, but the two people said the ECB would in the meantime give its green light to the bid.

MILAN: The European Central Bank is expected to clear Italian bank Intesa Sanpaolo's proposed takeover of smaller rival UBI Banca in the next couple of weeks, two people familiar with the matter said on Friday.

Intesa unveiled in February an all-paper exchange offer for UBI to create the euro zone's seventh-largest banking group and drive profits through cost cuts as well as a focus on insurance and asset management.

Intesa had expected to launch the offer at the end of June after receiving all the regulatory approvals, but a longer-than-expected antitrust review may lead to the bid being launched in September, sources have said.

Italy's antitrust body is expected to wrap up its probe only at the end of July, but the two people said the ECB would in the meantime give its green light to the bid.

For the offer to be launched Italy's market watchdog Consob must first approve the official prospectus for investors.

As part of its inquiry, Italy's competition authority on Friday heard representatives of Intesa's rival heavyweight UniCredit, another person familiar with the matter said.

It was not immediately possible to reach the regulator for a comment. The antitrust body has said the merger would significantly alter Italy's banking landscape.

UniCredit shares concerns over the excessively strong position the new entity may end up having in certain areas, which would not be beneficial for the local economies, the person said.

To address antitrust issues Intesa has signed a binding accord with BPER Banca to shed some 20 billion euros in assets as well 400-500 branches of the new group.

The antritrust authority, however, has said there is significant uncertainty over the accord.