UniCredit CEO: $10.5 Billion Banco BPM Bid is Fair as Offer Becomes Binding

UniCredit CEO Andrea Orcel has reiterated that the bank's $10.5 billion all-share bid for rival Italian lender Banco BPM is fair, as the offer became binding on Friday. The Milan-based bank filed its buyout offer with Italy's market regulator, setting a price floor and applying for regulatory approval. Orcel stated, "We consider our initial offer to Banco BPM shareholders to be fair and appropriate."

UniCredit's bid for Banco BPM aligns with its strategic goals of expanding market share and diversifying revenue streams. By acquiring Banco BPM, UniCredit gains access to a larger customer base and a broader range of financial services, enabling it to better compete with other major European banks. Additionally, the acquisition can help UniCredit achieve economies of scale and reduce operating costs, potentially improving its profitability in the long run.

Moody's, the rating agency, has affirmed UniCredit's Senior Preferred debt and long-term deposit ratings at Baa1, with a stable outlook, following the offer on Banco BPM. The agency believes that the acquisition would not prevent UniCredit's potential acquisition of Commerzbank AG and could even lead to an upgrade of UniCredit's stand-alone rating to baa2, one notch above Italy's sovereign rating. This would result in higher ratings on senior non-preferred and junior debt.

However, UniCredit's binding offer for Banco BPM, valued at €10.5 billion, could strain its financial resources, potentially impacting its pursuit of Commerzbank. Moody's affirmed UniCredit's Baa1 rating, indicating stable creditworthiness post-acquisition, but warned that a Commerzbank deal could lead to higher ratings on senior non-preferred and junior debt. UniCredit CEO Andrea Orcel has signaled that the BPM bid takes precedence over Commerzbank, suggesting a strategic shift in focus. However, the outcome of the BPM bid, including potential job cuts and integration challenges, could influence UniCredit's ability to finance and execute a Commerzbank acquisition.

The regulatory approval process for UniCredit's $10.5 billion bid for Banco BPM could impact its pursuit of Commerzbank. Moody's affirmed UniCredit's ratings, stating that the acquisition of Banco BPM would not prevent a potential acquisition of Commerzbank. However, the process may delay UniCredit's timeline for both deals. UniCredit CEO Andrea Orcel has indicated that the Banco BPM transaction would take precedence over any potential venture with Commerzbank. If regulatory approval for Banco BPM is swift, UniCredit could focus on Commerzbank sooner. Conversely, a prolonged approval process could slow UniCredit's expansion plans, affecting its ability to pursue Commerzbank.



In conclusion, UniCredit's acquisition of Banco BPM aligns with its strategic goals and long-term growth plans. While the bid could strain UniCredit's financial resources and potentially impact its pursuit of Commerzbank, Moody's affirmation of UniCredit's ratings indicates stable creditworthiness post-acquisition. The regulatory approval process for the Banco BPM bid could influence UniCredit's timeline for both deals, with a swift approval allowing the bank to focus on Commerzbank sooner.