Italian Court Rules on Unicredit’s Acquisition of Banco BPM

The Italian court has stated that in order for Unicredit to proceed with its acquisition of Banco BPM, the bank must adhere to the government’s requirement to withdraw from Russia.

The government’s demands, set forth by Giorgia Meloni, were deemed “completely legal,” and the court found no issues regarding their appropriateness.

Yet, the court did partially back Unicredit’s appeal concerning other conditions set by Rome related to the acquisition.

This landmark ruling, which came out on Saturday, removed the government’s stipulation concerning BPM’s merger loan ratio and the upkeep of both banks’ project finance portfolios.

It’s notable that this is the first instance where an administrative court has enforced requirements tied to a strategic acquisition agreement. The judge’s ruling effectively rescinds the current text of the government’s order.

Orcel, Unicredit’s CEO, had previously cautioned that if the government did not ease its demands, the deal could fall through.

It remains uncertain if the involved parties will pursue further appeals, or if the government will consider revising the statute in light of the judge’s decision.

The situation now leaves the transaction in a state of uncertainty. The BPM offer period, already extended due to the ongoing lawsuit, is set to conclude on July 23rd. Should the government not amend the law, Unicredit has the option to request a deadline extension. Regulators may also suspend deadlines as needed.

BPM expressed satisfaction with the outcome of the appeal and urged Unicredit to clarify its position regarding the acquisition.

Unicredit chose not to comment on the ruling, although sources suggest that the board will convene in the coming days.

As the second largest lender in Italy, Unicredit launched simultaneous purchase bids for both BPM and Germany’s Commerzbank last year.

Despite having significantly decreased its exposure to Russia following the 2022 invasion of Ukraine, Unicredit still maintains its local subsidiary, making it one of only two European banks to do so.

Orcel has resisted fully exiting Russia to avoid negative effects on the bank’s balance sheet, noting that any exit must receive approval from Russian authorities.