July 17, 2020 / 4:22 PM / 25 days ago

Italy's UBI says Intesa sale of branches would put deal objectives at risk

MILAN (Reuters) - The strategic objectives of Intesa Sanpaolo’s (ISP.MI) planned acquisition of UBI Banca (UBI.MI) could be threatened if Intesa were forced to sell its own branches rather than those of its smaller rival to address antitrust concerns, UBI said on Friday.

Italy’s antitrust authority has cleared Intesa’s bid for UBI, but said it would have to divest more than 500 branches to allay concerns the deal would leave it with a dominant position in several local markets.

The Authority also said Intesa had to be ready to sell its own branches if it could not sell UBI branches.

To win antitrust approval, Intesa agreed to sell 532 branches to BPER Banca (EMII.MI) expanding an initial accord to sell 400-500 branches. It has also promised to sell another 17 branches to a different bank within nine months if necessary.

UBI, which is resisting the bid, said the target for the deal announced by Intesa did not consider the possible impact of “measures alternative to the divestment of UBI’s branches”.

If Intesa were forced to sell its own branches, reaching the promised strategic and profit targets “could be adversely affected”, UBI said.

(This story corrects headline to show statement refers to strategic objectives not the deal itself.)

Reporting by Andrea Mandalà; editing by James Mackenzie and David Goodman

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