“UniCredit SpA (” UniCredit “) and the Ministry of Economy and Finance of the Italian Republic (the” MEF “), in its capacity as majority shareholder of Banca Monte dei Paschi di Siena SpA (” MPS “), have approved the prerequisites for a potential transaction involving the commercial activities of MPS, through the definition of a selected perimeter and adequate risk mitigation measures. To this end, they will initiate exclusive discussions to verify the feasibility of the transaction “. This is what is read in the statement released yesterday evening, Thursday 29 July, by the bank led by Andrea Orcel.
The press release continues:
“A potential transaction would allow the Group to accelerate its organic growth plans and facilitate the achievement of sustainable returns above the cost of capital. MPS could contribute, subject to the definition of the perimeter of the transaction, approximately 3.9 million customers, Euro 80 billions of customer loans, € 87 billion of customer deposits, € 62 billion of assets under management and € 42 billion of assets under administration “.
Again: “The transaction would allow the Group to strengthen its competitive positioning in Italy and in particular in the Center-North, where 77% of MPS branches are located, contributing among other things to an increase in the market share in Tuscany of 17 percentage points, in Lombardy and Emilia Romagna by 4 percentage points and in Veneto by 8 percentage points “.
“This transaction would also lead to a significant increase in prospective profitability, while preserving the capital position and improving the Group’s asset quality and risk profile on a pro forma basis. Any potential transaction would take place within the existing focus to be part of the Group on the release of the internal value that remains and will remain a priority “.
“Among the main assumptions agreed with the MEF to verify the feasibility of the transaction at an equity and economic level, we highlight:
its neutrality with respect to the Group’s capital position on a pro forma basis;
a significant increase in earnings per share after considering the possible net synergies of the transaction and in any case the maintenance of current levels of earnings per share even before taking into account the possible synergies up to 2023;
the exclusion of extraordinary disputes not relating to ordinary banking activities and all related legal risks, current or potential;
the exclusion of impaired loans and adequate coverage of any further credit risks that are identified also following due diligence through methods to be defined;
the agreement on personnel management based on the compendium inherent in the exercise of commercial activities, in order to ensure an easy, rapid and effective integration of the business into the Group “.
“The transaction under study will be subject to the positive outcome of the verification of the existence of the essential conditions of the transaction, of the legal, equity, fiscal, accounting and industrial due diligence, and of the discussions with the MEF and MPS aimed at reaching a more precise definition of the structure, terms and perimeter of the transaction, as well as the subsequent definition of the related binding agreements. Following today’s announcement, UniCredit will agree with MPS access to a dedicated virtual data room for carrying out the activity due diligence “.
“UniCredit announces that, despite the absence of any conflict of interest and in full independence of judgment, the Chairman, Professor Pier Carlo Padoan, due to his previous post as Minister of Economy and Finance, decided to abstain from the resolution of the Board of Directors. UniCredit will provide further updates on the potential transaction in compliance with the applicable provisions on market disclosure “.