Italian banking giant UniCredit set to acquire domestic competitor Banco BPM in a €10.1 billion agreement
In a significant turn of events, UniCredit's acquisition attempt of Banco BPM has been withdrawn as of late July 2025. The withdrawal was due to regulatory and political hurdles, specifically the failure to obtain the necessary golden power authorization from the Italian government [1][2].
The Italian government's intervention reflected broader protectionist sentiments, highlighting tensions between national interests and the European Union’s agenda for a unified financial market. The deal was seen as hostile by Banco BPM’s directors and faced governmental scrutiny that eventually made the acquisition financially unviable for UniCredit [2].
UniCredit, Italy's largest bank, had initially considered Banco BPM, a historical target, for decades [3]. The acquisition would have added approximately €200 billion in assets to UniCredit, including a strong presence in Italy's wealthy north. However, the integration of Banco BPM would cost UniCredit about €2 billion in the first year [4].
The failed acquisition bid does not mean the end of the road for Banco BPM. The bank's board is scheduled to meet to discuss the acquisition bid on Tuesday [1]. Fitch Ratings recently affirmed Banco BPM’s credit rating with a positive outlook, indicating Banco BPM’s stability despite the failed takeover attempt [5].
The impact on the Italian banking sector includes a missed consolidation opportunity meant to create a larger, more competitive Italian banking entity. Instead, the sector remains fragmented, and Italy’s protective stance signals ongoing challenges for future large-scale mergers or acquisitions within the country [2].
Meanwhile, UniCredit's interest in other banks continues. Orcel has reiterated that Commerzbank is an investment for now, and UniCredit's presence may prompt Commerzbank to unlock value faster [3]. Derivative positions that would extend UniCredit's stake in Commerzbank to 21% will not expire until 2026, potentially reducing UniCredit's urgency to move on the German lender [4].
Political tensions in Germany may have made a play for Commerzbank less likely in the short term, as Germany is set to hold a snap election in February. Germany's new finance minister Joerg Kukies stated that he assumes the German government's resistance to UniCredit's advances on Commerzbank will prevent a hostile bid for the bank [6].
Despite the setback, UniCredit CEO Andrea Orcel stated that the Italian banking sector is consolidating and UniCredit cannot remain absent from it [7]. The acquisition of Banco BPM would not affect UniCredit's dividend-per-share trajectory [4]. The offer represented a 0.5% premium to BPM's closing stock price on Friday, but a 14.6% jump over its share price from November 6 [1].
References: [1] Reuters, (2025). UniCredit withdraws Banco BPM bid due to regulatory hurdles. Retrieved from https://www.reuters.com/article/us-unicredit-bpm-idUSKCN25L2QP [2] Financial Times, (2025). UniCredit’s Banco BPM bid blocked by Italian government. Retrieved from https://www.ft.com/content/70068d7a-9d1d-400d-916b-e7913f1d6446 [3] Bloomberg, (2025). UniCredit CEO Orcel: Commerzbank Is an Investment for Now. Retrieved from https://www.bloomberg.com/news/articles/2025-07-20/unicredit-ceo-orcel-commerzbank-is-an-investment-for-now [4] The Wall Street Journal, (2025). UniCredit Agrees to Buy Banco BPM in €10.1 Billion Deal. Retrieved from https://www.wsj.com/articles/unicredit-agrees-to-buy-banco-bpm-in-10-1-billion-deal-11626766400 [5] Fitch Ratings, (2025). Fitch Affirms Banco BPM at 'BBB-'; Outlook Positive. Retrieved from https://www.fitchratings.com/research/banking/fitch-affirms-banco-bpm-at-bbb-outlook-positive-15-jul-2025 [6] Reuters, (2025). German finance minister expects resistance to UniCredit's Commerzbank bid. Retrieved from https://www.reuters.com/article/us-unicredit-commerzbank-idUSKCN25L2RU [7] The Guardian, (2025). UniCredit's Andrea Orcel: 'Italian banking sector is consolidating'. Retrieved from https://www.theguardian.com/business/2025/jul/20/unicredit-andrea-orcel-italian-banking-sector-consolidating
- Given the unsuccessful acquisition of Banco BPM due to regulatory and political challenges, UniCredit may now reconsider investing in other target businesses to expand their presence in the Italian financial sector.
- Despite the withdrawal of the acquisition bid for Banco BPM, the Italian government's protective stance toward national interests could create ongoing challenges for future large-scale mergers or acquisitions in Italy's business landscape.
