EC to Raise Concerns Over Italian Government’s Golden-Power Application

Brussels: The European Commission is poised to communicate its reservations to the Italian government regarding the latter’s application of ‘golden powers’ in UniCredit’s takeover attempt of Banco BPM, as revealed by sources on Tuesday.

According to Ansa News Agency, the Italian government invoked these powers to impose specific conditions on the merger, which include the gradual reduction of UniCredit’s operations in Russia, maintaining a certain loan-to-deposit ratio, and making investments in Anima Holding, a fund management company recently acquired by Banco BPM. These stipulations were set to facilitate the hostile takeover bid.

UniCredit is currently challenging the government’s use of golden powers. CEO Andrea Orcel has indicated that Italy’s second-largest bank may abandon its acquisition efforts if the matter is not resolved promptly.

The Commission’s forthcoming letter is not expected to convey a definitive decision but rather open a dialogue, allowing the Italian government to respond. The core issue at hand is whether, under European law, the authority to impose conditions on such mergers is reserved solely for the Commission.