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UniCredit secures pre-conditions for acquiring MPS

It is the deal everyone was waiting for – but UniCredit CEO Andrea Orcel has to appear guarded, as he enters exclusive negotiations with Banca Monte dei Paschi di Siena.

Photo: iStock

As Andrea Orcel announced on Thursday the contours of a potential deal to buy the world’s oldest bank, he was at pains to point out that UniCredit could still back out.

Buying Banca Monte dei Paschi di Siena (MPS) – or at least the good bits of it – would see UniCredit reclaim its status as Italy’s biggest bank, a status recently relinquished to Intesa Sanpaolo.

While UniCredit will leave behind any bits of MPS that do not fit into its strategy, the deal could increase UniCredit’s balance sheet by as much as €87 billion. It should bring more than 3.9 million clients, almost doubling its number in Italy today.

The number of clients is important; they will be the lifeline of what we have
Andrea Orcel, UniCredit

However, according to Orcel, a deal would merely accelerate UniCredit’s growth and its journey to the ultimate ambition of earning a sustainable return above its cost of equity. He finds himself repeating predecessor Jean Pierre Mustier’s argument that his bank’s stand-alone market share in Italy is big enough already.


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