Talks between Allianz and Amundi to merge their asset management divisions have been put on hold. The news, reported by Financial Timeshighlights a key breaking point between Allianz and Crédit Agricole — parent of Amundi — related to the governance of the new entity.
According to rumors, Crédit Agricole aimed to maintain a controlling stake of just over 50%, leaving Allianz with a 30% stake and reserving the remaining 20% for the market. However, the Germans would demand co-leadership, opposing a scheme of unilateral control by the French.
After weeks of negotiations, it seemed that a compromise was close, with Crédit Agricole willing to dilute its stake below 50%. But the distance over governance made the suspension of the talks inevitable, freezing a project that would have created one of the largest asset managers in the world with 3,000 billion euros of assets under management.
Crédit Agricole towards 19.99% of Banco Bpm
While the split with Allianz takes place, Crédit Agricole strengthens its presence in Italy. The French bank announced on Friday 6 December that it has increased its stake in Banco BPM from 9.9% to 15.1%, using derivatives to carry out the operation quickly and discreetly. The declared objective is to obtain authorization from the European Central Bank (ECB) to reach up to 19.99%, a crucial threshold for acquiring greater strategic influence on Banco BPM.
The move by Crédit Agricole, informally supported by the Italian government, displaced UniCredit, which was already courting Banco BPM with a Public Exchange Offer (OPS). However, UniCredit has declared that it is ready to dialogue with the French. In the meantime, Banco BPM is considering asking for an exemption from the passivity rule at Consob, a move that would allow its board of directors to oppose unwelcome transactions without having to wait for the vote of the shareholders’ meeting.
The third pole
Crédit Agricole’s takeover of Banco BPM is part of a broader scenario which sees the Italian government pushing for the creation of a “third banking hub” around Banco BPM and Monte dei Paschi di Siena. The entry of the French could rekindle this prospect, which remained frozen after UniCredit’s offensive.
In the short term, Crédit Agricole’s objective appears to be linked to protecting existing partnerships with Banco BPM. Currently, the two groups collaborate in consumer credit through Agos Ducato (of which Banco BPM holds 39%) and in the insurance sector through Banco BPM Assicurazioni. Furthermore, there is the expiry of the historic partnership between Amundi and UniCredit, scheduled for 2027, a strategic appointment that Paris wants to strongly monitor.
Market sources report that the French operation would be supported by JP Morgan and that behind the strengthening of Crédit Agricole’s share lies the construction of an alternative industrial project for Banco BPM, which could have the favor of the Italian government.
UniCredit’s plan: relaunch in sight?
With the entry of Crédit Agricole, UniCredit is now forced to review its strategy. The initial proposal envisaged an exchange ratio of 0.175 UniCredit shares for each Banco BPM stock, for an implicit price of 6.66 euros per share. However, the negative reaction of the market and criticism from analysts and investors, who defined the offer as “inadequate”, could force UniCredit to raise the offer.
The CEO of UniCredit, Andrea Orcelleft the door open by admitting that the group has until March to improve conditions. But with the entry of Crédit Agricole and the consequent surge in Banco BPM shares (which closed on Friday with a price already 13% higher than pre-OPS values), the costs of a possible relaunch have risen.
Deutsche Bank analysts estimate that UniCredit may have to add at least 3 billion euros to the offering to remain competitive. The Intermonte experts are even more optimistic, hypothesizing a €3.7 billion raise, judging the initial bonus offered by UniCredit to be “incongruous”.
Lessons from the past
Mergers and acquisitions (M&A) transactions in the European banking sector have always carried significant premiums. UniCredit’s offer on Banco BPM, which included only 0.5% premium compared to the pre-OPS price, appears distant from recent standards. For comparison, Intesa Sanpaolo initially offered a 27.6% premium for UBI Banca, a figure which later rose to 44.7% after the raise. Similarly, Crédit Agricole paid a 45.2% premium for Credito Valtellinese, while Caixabank and BBVA offered 20% and 30% premiums respectively in their merger deals in Spain.
Experts maintain that an adequate premium takes into account not only the valuation of assets and multiples (price/earnings), but also the synergies expected from the integration. In the UniCredit-Banco BPM case, the synergies are estimated at 1.2 billion euros, of which 0.9 billion derive from cost savings. If we consider that similar operations have recorded premiums between 20% and 45%, Orcel’s proposal could be revised upwards, also to avoid a potential counteroffer from Crédit Agricole.
A moving scenario
Italian banking risk enters a new phase. On the one hand there is Crédit Agricole, thanks to the support of the Italian government and its historic presence in the country. On the other hand there is UniCredit, led by the charismatic Andrea Orcel, determined not to lose the game.
If Crédit Agricole manages to get ECB approval to move up to 19.99% of Banco BPM, its position will be much stronger. The operation would force UniCredit to make a choice: relaunch the offer or risk losing Banco BPM, the key player in strengthening its presence on the Italian market.
