UniCredit Withdraws €17 Billion Banco BPM Bid Amid Italian Government Dispute

UniCredit has withdrawn its €14.6 billion all-share bid for Banco BPM after the Italian government's conditions, imposed under the national security 'Golden Power' mechanism, complicated the deal. These conditions included UniCredit's exit from the Russian market, divestiture of southern Italian loans, and preserving Banco BPM's local banking model, which UniCredit has contested in court. The Italian market regulator Consob suspended the bid for 30 days to allow more time for clarity amid disputes. The move has sparked broader concerns about regulatory and political interference in European banking mergers, as similar government resistance has affected other deals, such as BBVA's takeover attempt of Banco Sabadell. The European Commission has criticized Italy's approach for potentially violating EU merger rules, and a partial court annulment of some conditions has added to the uncertainty. UniCredit CEO Andrea Orcel indicated that without clear government conditions, the bank would not proceed with the deal, making the withdrawal the most straightforward outcome as the offer period expired.