June 9, 2020 / 1:21 PM / a month ago

Intesa's UBI bid faces antitrust hurdles over BPER deal: document

MILAN (Reuters) - Italy’s antitrust authority cannot clear Intesa Sanpaolo’s (ISP.MI) offer for rival UBI (UBI.MI) for now because of uncertainties over a planned asset sale aimed at solving competition issues, a document showed on Tuesday.

FILE PHOTO: Pages of a cheque book of Ubi Banca Popolare di Bergamo are seen in this picture illustration February 11, 2016. REUTERS/Alessandro Bianchi/File Photo

In the document, seen by Reuters and which summarises the watchdog’s preliminary findings on the proposed takeover, the regulator said it had not been able to take into consideration an accord between Intesa and BPER Banca (EMII.MI).

Intesa has agreed to sell 400-500 branches and 20 billion euros ($22.7 billion) in assets to BPER as it seeks to take over UBI to create the euro zone’s seventh-largest banking group.

“The (UBI) transaction can strengthen or create a dominant position for Intesa in numerous markets ... reducing competition ... in a significant and lasting way given the high market share and concentration, with a significant gap versus the second-biggest player in each area,” the document said.

After the COVID-19 pandemic hit Italy, Intesa said it was ready to accept a lower price from BPER to see the deal through.

Intesa and UBI both declined to comment.

The regulator said in a note that a final decision on the deal would be taken only after discussions with the interested parties.

A hearing is scheduled on June 18, the document showed.

The regulator said it was not clear exactly which branches BPER would be buying and there were areas not affected by the sale which posed antitrust problems.

It also said there is a risk that Intesa could fail to bring home the BPER deal if it ended up controlling only 50% of UBI’s capital plus one share.

Intesa’s bid has met resistance from UBI and some of its shareholders, prompting Italy’s biggest retail lender to say it would be satisfied with a take-up of 50% plus one share, after initially targeting a 66.7% acceptance.

The ECB on Friday authorised Intesa’s acquisition of the smaller stake.

News of the document was first reported by Il Messaggero daily on Tuesday.

Additional reporting and writing by Valentina Za; Editing by Kirsten Donovan and David Goodman

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