By Giuseppe Fonte and Valentina Za
ROME (Reuters) – Italy has limited scope to intervene in UniCredit’s swoop for smaller rival Banco BPM through its “golden powers”, which some ministers see as a way to have leverage over the deal, people close to the matter told Reuters.
So-called golden powers allow Italy’s government to block or set conditions on foreign and domestic corporate takeovers in strategic sectors such as energy, telecoms and banking.
UniCredit’s move has derailed a government’s push to combine BPM with state-backed Monte dei Paschi di Siena (MPS) to form a third large bank alongside Intesa Sanpaolo and UniCredit.
Prime Minister Giorgia Meloni’s administration has consistently said the re-privatisation of MPS, which the state rescued in 2017, should help it to strengthen the banking system while preserving competition.
Meloni is also keen to have domestic savings invested in Italy, and BPM is in the process of buying Italy’s biggest independent fund manager Anima Holding, which is also an MPS partner.
Italy has reserved the right to use its golden powers with regard to UniCredit’s takeover proposal for BPM.
Speaking on condition of anonymity due to the sensitivity of the matter, the sources said Rome could use golden power rules only to set some “mild conditions” on the deal, while an outright veto would be hard to defend in court.
Prescriptions on how Italian savings are invested could also become legally contentious unless politicians decide to take that risk, one of the sources said.
Rome would have more leeway to act in UniCredit’s potential takeover of Germany’s Commerzbank, the source added, as it could set conditions on any plans to move the registered office or central functions abroad. UniCredit has ruled out shifting its base to Germany.
The Treasury was not immediately available for comment. UniCredit declined to comment.
GOVERNMENT SPLIT
The golden power rules, designed at the EU level to fend off unwanted non-EU buyers, were expanded during the COVID-19 pandemic to shield companies when valuations crashed, with some countries such as Italy including the banking sector.
Italy has used golden powers mainly to block takeover deals involving non-EU players such as Chinese and Russian firms, as EU treaties promote the free movement of capital within and among member countries.
UniCredit, having already made moves on Commerzbank, last month launched a 10 billion euro ($10.5 billion) unsolicited all-share offer for Banco BPM, which was rejected.
The move angered ministers from the League party led by Deputy Prime Minister Matteo Salvini.
But Foreign Minister Antonio Tajani, leader of the co-ruling Forza Italia party, said on Wednesday he did not believe there could be grounds to apply golden power rules.
BPM CEO Giuseppe Castagna has raised the prospect of 6,000 job cuts, nearly a third of the total, as a result of the proposed deal.
Unions have been more cautious, only saying jobs must be protected.
Rome is keen to preserve jobs, but seeking a clear commitment from UniCredit on BPM jobs would exceed the scope of EU rules governing golden powers, one of the sources said.
The government, however, could ask for guarantees on bank branches to ensure services to customers, the person added.
UniCredit CEO Andrea Orcel, whose cost cutting at UniCredit has spared the network which he sees as a strong point, has said BPM’s branch network would not suffer, with cost savings deriving mostly from procurement contracts.
($1 = 0.9495 euros)
(Reporting by Giuseppe Fonte and Valentina Za. Editing by Jane Merriman)
