UniCredit, Italy’s second-largest bank, is likely to withdraw its high-profile offer to acquire Banco BPM, marking a dramatic turn in one of the country’s most closely watched banking consolidation efforts. CEO Andrea Orcel confirmed in a Friday interview with Italian daily La Repubblica that persistent government restrictions and legal appeals have made it increasingly improbable for the deal to proceed. “If we don’t manage to resolve the problems, as is probable, we will withdraw,” Orcel stated, signaling the near-certain collapse of the proposed merger.
The €14.2 billion all-share bid, which followed months of negotiations and regulatory scrutiny, faced a series of formidable obstacles. Chief among them were Italy’s “golden power” rules, invoked by the government to protect national interests, and stringent conditions imposed by both Italian and European authorities. Although the European Commission granted conditional approval for the merger—requiring UniCredit to divest 209 Banco BPM branches to maintain market competition—compliance with these and other stipulations, including a mandated exit from Russian operations, proved too onerous for UniCredit.
Shareholder apathy further complicated the situation. As of June 2025, only a minuscule fraction of Banco BPM shares had been tendered, falling far short of the two-thirds threshold needed to avoid a massive write-off for UniCredit. With a court ruling on the enforceability of the government’s conditions scheduled for July 9, the uncertainty has already eroded confidence in the deal’s viability. Orcel himself estimated only a 20% chance of success, citing the unclear and potentially punitive nature of the government’s demands.
The likely withdrawal leaves both banks at a crossroads. For Banco BPM, the end of merger talks could open the door to smaller, more manageable deals and reinforce its position as a resilient, standalone player in Italy’s fragmented banking sector. For UniCredit, the setback underscores the growing challenges of cross-border and domestic consolidation in Europe, as regulatory and geopolitical complexities increasingly outweigh the potential synergies of large-scale mergers. As the Italian banking landscape evolves, the episode serves as a cautionary tale about the limits of M&A-driven growth in the face of mounting regulatory scrutiny.
“Your donation helps us cover global events, ensuring everyone stays informed.”
(Source: Global Banking and Finance Review | Market Screener | La Repubblica )
