Business
Political meddling changes euro-bank M&A playbook
Political meddling changes euro-bank M&A playbook
About this update from Banco Bpm Spa
By Liam Proud Is major bank M&A politically possible in Europe? That’s what dealmakers and CEOs across the continent are wondering after politicians in Berlin, Madrid and Rome erected obstacles to some 60 billion euros ($70 billion) worth of possible deals. The takeaway from the recent flurry of activity is that bank takeovers can still happen, but dealmakers and bidders may need to refine their tactics.After a quiet decade for tie-ups between European lenders, BBVA BME:BBVA Chair Carlos Torres Vila fired the starting gun last April with a share-based bid for 14-billion-euro Banco de Sabadell BME:SAB. Then, in September, UniCredit MIL:UCG CEO Andrea Orcel snapped up a stake in 30-billion-euro Commerzbank XETR:CBK as a prelude to a possible takeover, before launching an unsolicited all-share offer for Banco BPM MIL:BAMI, currently worth 15 billion euros.All three situations were effectively hostile, and at least two of them now seem likely to go nowhere. Orcel has accepted that his BPM hunt may have ended, after Rome handed down painful conditions, including selling his Russian business and maintaining the target’s loan-to-deposit ratio. Equally, his Commerzbank tilt seems over for now after Chancellor Friedrich Merz’s recent criticism of what many in Germany saw as a hostile raid.BBVA’s planned takeover of Sabadell, meanwhile, is looking increasingly complicated. The Spanish government, ostensibly fearing job losses and fewer small-business loans, last week said 70-billion-euro BBVA could not integrate its target for three to five years if it goes ahead with a deal. That pushes out some of the 850 million euros in planned cost savings, making it harder for Torres to raise his bid, which seems necessary since the current offer looks low.It would be rash, however, to conclude that governments simply don’t want bank deals to happen. Some tie-ups are proceeding without drama, including BPCE’s recent purchase of 6-billion-euro Novo Banco. That deal, with a French buyer, works for Portugal because Lisbon is worried about Spanish dominance of its financial system and has no reason to fear the Gallic interloper. And Italy’s government seems to have no issue with Banca Monte dei Paschi di Siena’s MIL:BMPS hostile 15-billion-euro Mediobanca MIL:MB play, made in January. That may be because it aligns with Rome’s mission of creating a third major bank to rival twin 9...