UniCredit CEO says $10.5 billion Banco BPM bid is fair as offer becomes binding

AI Sentiment: Bullish
Reason: UniCredit's CEO has defended the company's $10.5 billion offer to acquire Banco BPM as part of its strategy to expand in Italy. Despite criticism, the CEO believes the merger will result in a more resilient bank and benefit both shareholders and customers.

The CEO of UniCredit, Andrea Orcel, has declared that his company's $10.5 billion offer to acquire Banco BPM is fair, and the proposal is now binding. The bid is part of UniCredit's strategy to expand its presence in the lucrative market of Italy and is seen as the most significant banking merger in the country in more than a decade.

Orcel stated that the offer is a "fair price" and is in line with the bank's disciplined approach to capital allocation. He also emphasized that the deal is not a "must-do" for UniCredit, but it would provide a strategic advantage in their ongoing efforts to strengthen their position in the Italian market. Orcel further added that the approach to the deal was "not opportunistic but strategic".

The proposed merger has faced criticism and concerns from politicians and unions, who fear job losses and the impact on customers. However, Orcel has sought to reassure stakeholders, saying that the deal would result in a more resilient bank, better able to support Italy's economy. He explained that the merged entity would have a more comprehensive customer base and improved efficiency, which would ultimately benefit both shareholders and customers.

The deal is also subject to regulatory approval. In the scenario where the regulators do not approve the deal, Orcel has assured that UniCredit is prepared for all eventualities, hinting at the possibility of alternative strategies for growth. He stated, "We have a plan B and a plan C."

UniCredit's move to acquire Banco BPM is a significant step towards consolidation in Italy's fragmented banking sector. With this merger, UniCredit aims to increase its customer base, improve operational efficiency, and create a banking powerhouse capable of supporting Italy's economic growth. The deal reaffirms UniCredit's commitment to expanding its footprint in Italy, which is a crucial market for the bank.