Italy's UniCredit yesterday sealed its €22 billion acquisition of Capitalia, a deal that was concluded at great speed and that will give birth to Europe's second-largest bank.
The combined entity will have a market capitalisation of €100 billion, second in Europe to HSBC. It adds to the astonishing changes in Italian banking since the resignation in 2005 of Antonio Fazio as governor of the Bank of Italy.
The autocratic Mr Fazio had a veto on mergers, but since his departure there have been six sizeable mergers and acquisitions, including last night's expected news that two mutual banks, Banca Popolare dell' Emilia Romagna and Banca Popolare di Milano, were also combining.
The enlarged UniCredit will be second in market share in Italy to the newly merged Intesa Sanpaolo.
UniCredit is paying an equivalent of €8.41 for each Capitalia share, 5.5 per cent above the share price on Friday. UniCredit estimates that €800 million in cost synergies will be achieved and is expecting pretax integration costs of €1.1 billion.
Alessandro Profumo, UniCredit's chief executive, said in an interview there had been no time for due diligence, but he was confident there would be no large additional restructuring charges.
UniCredit has received overwhelming backing from Italy's politicians because the agreement cements a large Italian presence in European banking and resolves the battle between Cesare Geronzi, Capitalia chairman, and Matteo Arpe, its chief executive, over merger strategy. Mr Arpe announced his resignation yesterday. Mr Geronzi is expected to move to Mediobanca, the bank. For now, he is lead deputy chairman of the combined bank. Mr Profumo praised Mr Arpe's work at Capitalia.
He said shareholders were expected to vote on the merger by the end of July and if regulatory approval was received the deal could close by the end of September. A counterbid could not be ruled out, analysts said.
Capitalia was advised by Claudio Costamagna, former head of investment banking for Goldman Sachs in Europe.
Merrill Lynch advised UniCredit. Citigroup, Rothschild and Credit Suisse were hired by Capitalia to conduct fairness opinions.
The merged bank will have a 16 per cent market share in Italy, putting it behind Intesa Sanpaolo.
