UniCredit + Banco BPM: A European champion empowering Italy to progress

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Yet this is just the start. Our journey is far from over and what we believe we can achieve in the next three years goes much further. This is why we are here. This is why we should be excited and motivated to work together towards our objectives. 

Today, we are taking the next step on our journey by extending an offer to Banco BPM stakeholders to join us.

If our offer is accepted, it will accelerate our business in Italy and create substantial value for all stakeholders. This is consistent with the approach we have always taken to M&A. We have always said that we would consider M&A as an accelerator where it increases the value we can create for all our stakeholders and enhances the prospects of our group. We believe this is one such example.

Of course, Italy is not only currently our most sizeable business, but it is also one of the most value creative. Strengthening our franchise by joining forces with a bank that is as complementary as Banco BPM is the right step for us, and we believe for Banco BPM - particularly in the current rate environment. We also believe Banco BPM will benefit from the rollout of our UniCredit Unlocked philosophy through our experienced practitioners who stand ready to support Banco BPM's team in this effort.

While the past three and a half years have been about focusing on unlocking the trapped value inside UniCredit and demonstrating what we are capable of, the next three to five are about building on these foundations, absorb expected headwinds and grow profitably and sustainably. We anticipate that M&A, where our conditions are met, will be part of this.

We know from experience that for M&A to succeed, those conditions must be right. It must not only clearly add value to our business, it must also be subject to the right valuation, and meet the conditions for a seamless integration that does not distract our focus on our day-to-day business. This is the only way to ensure all stakeholders benefit from the outcome. 

In the case of Banco BPM, we believe all these conditions are met. At the right valuation, this acquisition will allow us to create substantial value for stakeholders on both sides, to broaden our geographic reach, expand our client base across both retail and corporate clients, and further grow our premium businesses leveraging our best-in-class products to the benefit of individuals and corporates across Italy. It will also cement our position as the second largest bank in Italy, thereby increasing competition within the country, and creating an even stronger bank in the Italian market.

At this point the offer we have made is non-binding and there is no certainty that a deal will result. The responsibility for assessing our offer lies with the Board of Banco BPM and both our shareholders. We look forward to engaging with them in further detail.

What we can say, however, is that we have made this offer in good faith and in a manner that is consistent with our strategy, our stated metrics and our overall ambition to build a new European banking champion that creates outsized value. 

The offer we have made today does not have any implications on our ongoing investment in Commerzbank, a bank that operates in another of our key markets. The situation there is very different. Currently, for reasons everyone is aware of, we are the leading investor and have not made an acquisition offer. Our investment aims to drive Commerzbank to unlock the substantial untapped potential we see within the bank. Moving forward, we may either seek to go further if the conditions are right or to exit our investment and return the capital to the Group. We want to be clear one more time that any further progress on that will take some time - not only because of practical reasons relating to German takeover, corporate and regulatory law but more importantly because I think it is important to respect the electoral process in Germany. We therefore fully expect any acquisition and integration of Banco BPM (which we expect to be fast and seamless) to be distinct from any future hypothetical integration between HVB and Commerzbank. 

For now we are a group launching an acquisition offer in one of its markets - Italy - while retaining a sizeable downside protected stake in another institution in another - Germany. 

Neither the Commerzbank investment nor this offer will be resolved overnight and there are several steps that need to take place before either of them come to fruition. However, we believe both have the potential to add significant value to UniCredit and to our mission to build a stronger more sustainably profitable bank that Europe wants, needs and can be proud of. 

We are moving into an exciting new phase for UniCredit and it is only possible because of the exceptional work you have all put in over the past three and a half years to unlock the significant trapped potential within our group. Thank you! 

My task now is to repay that effort by making the sensible, strategic decisions that will help to deliver and surpass the promises we set out at our strategy day three years ago. 

I will do my part with energy, courage and integrity all the way. That is my commitment to you. 

Thank you for your continued support for our mission.

Andrea