Milan, July 29 2021 - UniCredit and the Ministry of Economy and Finance ("MEF") of the Republic of Italy, the majority shareholder of Banca Monte dei Paschi di Siena S.p.A. ("MPS"), have approved the prerequisites for a potential transaction involving the commercial operations of MPS with a carefully defined perimeter and appropriate risk mitigation. Exclusive discussions will now begin to assess the feasibility of a transaction.
The potential transaction would allow the Group to accelerate its organic growth plans and help deliver the ultimate goal of sustainable returns above the cost of equity over the cycle. MPS could contribute, subject to the definition of the final perimeter, approx. 3.9m clients, Euro 80bn customer loans, Euro 87bn customer deposits, and Euro 62bn assets under management and Euro 42bn assets under custody.
It could strengthen the Group's competitive position and offering within Italy, in particular in the Central and Northern regions, where 77% of MPS branches are located. It could deliver market share growth of 17 percent in Tuscany, 4 percent in Lombardy and Emilia Romagna and 8 percent in Veneto.
This would lead to a significant increase in future profitability for the Group, while the prerequisites of the transaction would allow UniCredit to preserve its capital position, improve its asset quality and its risk profile on a pro-forma basis. Any potential transaction would take place alongside the Group's existing focus on unlocking internal value, which remains a current and ongoing priority.
The main prerequisites agreed with the MEF to assess the feasibility of the transaction from an economic and financial perspective include but are not limited to the following:
- capital neutrality of the transaction on the capital position of the Group on a pro forma basis;
- in 2023, a significant accretion of the Group earnings per share when including the after-tax synergies deriving from the transaction, provided that the Group earnings per share shall remain at least unaffected if synergies are not factored in;
- exclusion of all the extraordinary litigations not related to the ordinary banking activity and all relevant legal risks, actual or potential;
- exclusion of NPEs and adequate protection from other potential credit risks, which may be identified also during the due diligence process, through actions to be defined;
- agreement on the management of personnel, consistently with the perimeter of the going concern relating to the commercial activities, with the aim of ensuring a seamless, quick and effective integration into the Group.
The transaction under analysis is subject to the positive outcome of the assessment of the prerequisites as agreed, as well as the legal, economic, tax, accounting and industrial due diligence, the discussions with the MEF and MPS aimed at defining the transaction structure, terms and perimeter, and the subsequent definition of the relevant binding agreements. Following today's announcement, UniCredit will agree with MPS the access to a virtual data room for the execution of the due diligence.
UniCredit confirms that, despite the absence of any actual conflict of interest and in full independence of mind, given his previous assignment as Minister of Economy and Finance the Chairman, professor Pier Carlo Padoan, abstained from the relevant resolution of the Board of Directors.
UniCredit will provide further updates on the potential transaction according to the applicable market disclosure requirements.
Andrea Orcel, CEO of UniCredit Group, will host a company call tonight, 29 July 2021, at 8.00 pm CEST. See below connection details.