The event was hosted in an über-trendy venue on the edge of the City – you may even be a member of the converted tea warehouse with rooftop swimming pool. The only gripe of the evening came from the fact that no amount of refurbishment could disguise the fact that the building only has one lift; as we were in a rush to get to the bar, myself and two of my colleagues from Euromoney decided it would be quicker to walk up the six flights of stairs.
As you might expect, the party was packed with members of the financial press – most hacks will go anywhere for a free drink. As the Champagne flowed, I have to confess I did feel a tad sorry for those SocGen investment bankers who found themselves collared by pie-eyed journalists. Inevitably, there was talk about the impact of the credit crisis. There was also a bit of banter about whether the party would be held in the same format in 2008.
The reason this was being discussed was not because of anticipated cost cutting, but rather because the whispers that SocGen is soon to become part of the UniCredit banking conglomerate are getting louder and louder. Some are suggesting that a deal could be done by January.
UniCredit is a fascinating organisation – read next month’s Euromoney to find out a more about how the bank sees its FX business developing. Despite its huge size – at the time of writing, its market capitalization is around €75 billion – it has managed to stay under the radar screens of most FX players. This is a little surprising to us old timers, who remember that many of its constituent parts, such as HVB, BankAustria, Banca di Roma and Credito Italiano, were all respected and active players in their domestic markets. If UniCredit does buy SocGen, it will have, to use a phrase my editor hates, one hell of a footprint.
Of course, there are likely to be obstacles. To be flippant – which may be in bad taste in the week after Remembrance Day – I can’t see a French institution rushing into partnership with an axis of German, Italian and Austrian banks. I’m told that UniCredit and SocGen would fit together nicely – perhaps Barclays feels the same, while the merger of two more equal institutions may hold greater appeal for the French government, which has never been shy of protecting its national interests.
If the deal goes ahead, the enlarged UniCredit would have a market cap of around €122 billion ($177 billion) at today’s prices – almost identical to Citi’s. It will be interesting to see how it affects next year’s winter party. I don’t mind Teutonic beer, but I’ll take Champagne over Asti Spumante any time.
