Italy's Intesa could delay takeover of UBI as approval process drags

The all-share deal would be the largest European banking merger in a decade

The Intesa Sanpaolo logo on a building in Milan, Italy. A proposed all-share merger with UBI would create the eurozone's seventh-largest banking group. Reuters  

Italy's Intesa Sanpaolo may have to delay launching a takeover bid for rival UBI until September as antitrust approval for the biggest European banking merger in a decade is taking longer than expected.

Intesa unveiled on February 17 an all-paper exchange offer for UBI to create the euro zone's seventh-largest banking group, and had expected to launch the bid at the end of June, soon after receiving regulatory clearance.

Italy's antitrust regulator, however, has only recently opened an inquiry into the transaction, and a ruling is only expected towards the end of July.

The antitrust body has said the merger would reshape Italy's banking landscape, ending the current "broad symmetry" between heavyweights Intesa and UniCredit and preventing UBI from leading moves to create a third large player.

All interested parties declined to comment.

To address possible antitrust issues, Intesa has agreed to sell some assets of the combined entity to BPER Banca.

UBI, BPER, and UniCredit have all been admitted to take part in the antitrust investigation, meaning they will be heard by the authority and can file briefs and access documents, a source said.

Insurer Cattolica – which has a 'bancassurance' accord with UBI allowing it to sell its products to the bank's client base – and UBI shareholder Fondazione Banca del Monte di Lombardia will also be involved.

Italian market watchdog Consob, which must approve the offer document before Intesa can launch it, only needs to wait for the go-ahead from banking and insurance supervisors, but will also likely await antitrust approval.

Thin market activity in August makes it more likely Intesa would then wait until September to launch the bid, sources said.