Intesa-Ubi, here’s what Unicredit can do to blow up the marriage. With a move Mustier could deny himself

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There is great expectation on Friday 29 May for the hearing of Unicredit to the Antitrust Authority, as part of the recently opened investigation into the public exchange offer (Ops) of Intesa Sanpaolo on Ubi Banca announced last February, a few days before the Covid-19 nightmare from Sars-Cov-2 began in Italy. According to rumors, it was the same bank led by Jean Pierre Mustier who asked to be heard, with the aim of underline the impact on competition, evidently for Unicredit negative, that the integration between the first and third banks in the country by capitalization could have.

From the text of the provision of the Competition and Market Authority, it emerges quite clearly why Unicredit urgently needs to explain the negative effects of the concentration, being de facto ally of Ubi, who immediately deemed the operation hostile (and ultimately decided to apply to the court to enforce the Mac clause): “The presence of two larger groups emerges in Italy – writes the Antitrust – facenti headed by Intesa Sanpaolo and Unicredit, which operate on the whole national territory (…) and who are able to play a significant role also at supranational level, and numerous medium-sized groups, (…) including the group headed by Ubi, which is present in 18 regions out of 20 “.

What would happen in case of interaction between Intesa and Ubi? “This general context – always writes the Agcmwould be significantly modified as a result of this transaction mainly in two respects. On the one hand, it would be deprived of the presence of a medium-sized operator such as Ubi, which in the not distant future could have acted as a meeting place, establishing a third large banking group that would have joined the two major banks, Intesa and Unicredit “.

“On the other hand – adds the Antitrust – the substantial symmetry between the first two national banking groups would be overcome as a result of the transaction in question, with the important growth of Intesa “. In other words, following the marriage with Ubi, Intesa will become by far the first Italian bank in front of Unicredit. That therefore, if it wanted to reach the competitor in terms of size, it would be forced to take over another group. But still in early May, when Intesa had already moved on Ubi, CEO Mustier had ruled out the possibility of mergers and acquisitions (m & a).

Read also: What is behind Unicredit’s coming on the pitch as the third inconvenient in the wedding between Intesa and Ubi

“For both profiles – underlines the Agcm – in the preliminary phase, it will be possible make prospective considerations in terms of competitive effects “. And these forward-looking considerations will also be made on the basis of Unicredit’s opinion (Cattolica Assicurazioni, Bper, Banca del Monte di Lombardia Foundation and the same agreement have already been heard). At the end of the procedure, then, the Authority led by Roberto Rustichelli will issue its verdict, saying whether the operation can be done or not or giving a conditional go-ahead, that is linked to the adoption of some measures, such as the sale of branches (already the operation involves the sale to Bper of 400-500 excess branches).

So the first thing Unicredit can actually do to hinder Intesa’s marriage to Ubi is be so convincing in front of the Agcm that it does not give the go-ahead to the operation; at least not an unconditional go-ahead. Moreover, on the competitive aspect, the Antitrust Authority already seems to have more than one doubt about the effects of integration. For example, the guarantor of competition writes about the insurance market: “It cannot be excluded that, at least in the provinces in which Intesa holds a market share of more than 15%, the operation is likely to produce effects on competitive dynamics. These markets, therefore, will be evaluated in the preliminary phase “.

Also read: In the balance sheets of banks and insurance companies there is a mine called BTP. That only for Intesa, Unicredit and Generali it is worth almost 200 billion

There’s more. There are those who on May 28 even speculated that Unicredit may purchase 10% of Ubi Banca, which according to the market capitalization of the same day would be around 290 million euros. “We believe that indiscretion – commented the Equita analysts (who are among Intesa’s consultants in the transaction) – has little foundation since Unicredit would have no direct economic advantages from the eventual acquisition, if not that of hindering the Intesa deal avoiding the strengthening of a competitor’s competitive position “.

“A possible acquisition of a minority stake in Ubi – they add from Equita – it would therefore be penalizing news for Unicredit’s evaluations also because would deny the strategy pursued so far by management which, through various sales (Pekao, Pioneer and, finally, Fineco and Mediobanca) wanted to refocus the bank’s activities on the core business “. In fact, with the acquisition of a stake in Ubi, Mustier would not only not stick to what was declared just in early May, but would defeat his work in recent years, when it sold practically all the main shares, including the one in Mediobanca (which is one of Intesa’s consultants in the transaction).



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