UniCredit’s Deal Breaker Is a Huge Risk for Italy
Government meddling in banking takeovers may backfire.
Prime Minister Giorgia Meloni and Finance Minister Giancarlo Giorgetti are interfering with Italy’s banking industry in ways that risk backfiring.
Photographer: Filippo Monteforte/AFP/Getty Images
Italy’s government is determined to shape its financial sector to its own liking, frustrating competing visions. That’s bad for the banks involved and their investors. It’s also bad for the country: At worst, many of its firms may become increasingly uninvestable.
UniCredit SpA abandoned its near €15 billion ($17 billion) bid for Banco BPM SpA this week because stubborn and unjustified government opposition has become too big a hurdle. The outcome isn’t terrible for UniCredit — it’s a missed opportunity for growth, but the lender’s shares jumped after it lifted guidance for payouts to investors over the next three years. Without a takeover bid, BPM’s stock unsurprisingly fell.