Il bank risk is about to end, and the government Italian is on its way to closing the match with a score of three to zero.
The first point was earned by blocking the attempt of Mediobanca to exchange shares of Assicurazioni Generali General Bank. The management of Mediobanca has in fact decided to postpone to a date to be determined the meeting that should have sanctioned the public exchange offer (OPS), which risked proving to be a failure. The operation, not free from potential conflicts of interest and opaqueness of future commercial relations between the two entities, had been openly opposed by Caltagirone, which in turn brings with it many conflicts of interest, and indirectly by the Italian government. The latter in fact prefer to keep a free hand on the Generali package held by Mediobanca (13,2%), in the event that Ps take control of Cuccia's bank. In this scenario, the future merger between Monte dei Paschi and Mediobanca would make it easier to control the leading Italian insurance group. Or, in perspective, one could think of a merger between Mps/Mediobanca and the entire Generali group, rather than just with its bank.
Golden power: the government blocks Unicredit on Banco Bpm
The second point in favor of the government is the de facto blockade of the public exchange offer di Unicredit suBpm bank, obtained through an unscrupulous use of the golden power, despite the fact that it was a merger between two Italian banks. In this case, Andrea Orcel, CEO of Unicredit, has tried in every way to convince the government of the absurdity of certain requests, but so far without success. It is likely that Banco Bpm - to which the League is linked for having saved Credieuronord during the Fiorani era - is destined to merge with Mps, so as to provide the Sienese bank with a critical mass sufficient to compete in the retail and small business markets.
The third pole: the challenge between Mps and Mediobanca
The third and decisive point will be achieved by completing the public exchange offer between Mps and Mediobanca, first step towards the creation of the third banking hub. The operation is considered essential to prevent MPS, Mediobanca - and perhaps even Generali - from ending up in foreign hands. Here the game is played on the exchange value between the two stocks (currently discounted by about 3%). But it is known that both the government and its allies (Caltagirone and Delfin) have considerable resources that they will not skimp on to achieve their ambitious projects.
The other two operations in progress – between Bper e Popular of Sondrio, is between Bank Ifis e Illimity – are placed in a “lower series” that is of little interest to the government. In all likelihood, their course will end without too much heartache.
Government supremacy in European bank mergers
The clear supremacy of governments is not just an Italian phenomenon. In Germany, the government has blocked Unicredit's ambitions on Commerzbank, while the Portuguese one - without too many ambiguities - favored the French Bpce (Banques Populaires et Caisses d'Épargne) over the Spanish Caixa for the acquisition of Novobanco, the fourth largest bank in the country.
In short, in this historical moment of great industrial policy improvement, governments want to play an active role in the banking aggregation process, in spite of the European single market and free market logic.
The Big Losers of Risk: Unicredit and Mediobanca
The grown-ups defeated of this game are the top management of Unicredit and Mediobanca. The first aimed to obtain a critical mass in Italy such as to be able to to compete on equal terms with Intesa San Paolo. The second dreamed of transforming Mediobanca into a new Italian – or perhaps even European – Morgan Stanley.
For now, the embryo of a third Italian banking hub will probably emerge, still rather unbalanced. It is reasonable, however, to expect that, in the coming months, the Italian government – together with the fully aligned management of MPS – will complete the project of making the Sienese bank a major player through further acquisitions.
Unicredit's ambitions and perhaps also Bper's remain to be satisfied. But that's another story. It is however essential that the managers of these banks remember to listen carefully to what the governments involved think before moving forward with other potential acquisitions.
PS I forgot to mention that the government, together with Caltagirone and Delfin, also managed to block the project of Asset Management Merger di Generali with that of Natixis. An operation with a probably questionable industrial and governance profile, in which it was enough just to threaten the use of the golden power to send it to the attic.
