Oops, that’s why the Antitrust Authority will disappoint Intesa Sanpaolo and Bper on Ubi Banca

Oops, that's why the Antitrust Authority will disappoint Intesa Sanpaolo and Bper on Ubi Banca

All the reasons why the Market Guarantor Authority cannot currently authorize Intesa Sanpaolo's Ops on Ubi. Does the Guarantor also reject the agreement for the sale of a Ubi business branch to Bper?

Despite an almost unanimous pro Ops media campaign by Intesa Sanpaolo on Ubi Banca, the Antitrust Authority will disappoint fans of the banking aggregation in Italy.

In fact, the authority that supervises the market and the competition believes that the concentration between Intesa Sanpaolo and Ubi Banca "is not at the state of the documents likely to be authorized" because it is suitable for "producing the creation and / or strengthening of the dominant position" of Understood "in numerous markets" without the agreement for the sale of a business branch to Bper "being considered, as an intervention aimed at resolving the critical competition".

This is what emerges – according to the ANSA agency – from the communication of the preliminary findings to the parties.

Regarding the Intesa-Ubi transaction "no decision has been taken by the Authority on the compatibility of the transaction with the competition rules", however, the Antitrust clarified in a note, specifying that at present "it has been sent to the the companies concerned are the only Communication of the Preliminary Findings, which represents the preliminary assessment of the Authority's offices regarding the possible competitive criticalities of the concentration. "The final decision on the compatibility of the concentration will be taken by the Board only after the outcome of the cross-examination with the companies concerned" which should arrive in the second half of July, the note concludes.

The Antitrust Authority identified "639 critical areas in the banking collection market, 782 in loans to consumer households and 218 in loans to producer families-small businesses, in which the transaction in question", ie the combination between Intesa Sanpaolo and Ubi Banca, "leads to the creation or strengthening of a dominant position", reads the Communication of the preliminary findings of the authority.

The "areas" mentioned are the so-called "catchment area", that is the catchment areas of the 1,064 Ubi branches, the size of which was determined, according to Antitrust practice, considering a maximum journey time of 30 minutes by car, calculated on the basis of the mobility of bank customers' demand.

The authority based in Piazza Verdi also stresses that the total number of problem areas is naturally less than the sum of the figures reported, given that in many cases the same area can be critical in two or more markets. The areas in which the bank created by the combination would have, among other things, "a joint market share greater than or equal to 35% 'and a distance from the second operator, in terms of market share, were identified as critical. not less than 10 percentage points ".

After the green light learned yesterday by the Bank of Italy to the acquisition of Ubi's subsidiaries by Intesa Sanpaolo, an icy shower is therefore arriving for the plans of the banking group led by the managing director Carlo Messina, who among other things has had to deal with it in the distance from the second largest banking group active in Italy, Unicredit, which not surprisingly wanted to be listened to by the Market and Competition Guarantor certainly not to support Intesa Sanpaolo's projects.

A move – that of Intesa – that many insiders have defined as a killer acquisition by the group led by the CEO, Carlo Messina, who in fact castrates the ambitions of the third Italian credit center of the group headed by the CEO, Victor Massiah.

On the other hand, the operation planned by Intesa in the event of success – according to the Antitrust Authority – would have radically changed the Italian banking landscape, consolidating the leadership of Intesa, which would encompass the fourth national group, crushing the ambitions of the third credit pole in Italy, and would end the "substantial symmetry" with Unicredit.

Significant on this point was what Fulvio Coltorti, former director of the Mediobanca study area, had written on Facebook on the day of the news of the launch of the investigation by the Guarantor of the market and of the competition : “With much delay, it seems to me, the Antitrust Authority deals with the acquisition attempted by Intesa Sanpaolo on Ubi. In Italy, the banking concentration with two groups, IntesaSanpaolo and Unicredit, which are the masters of the system, is all too evident. The merger in question would further increase this concentration, create an even larger bank (Intesa Sanpaolo), against the most basic rules of good banking governance (rules that unfortunately the last major crisis of 2008 was not able to teach even to vigilantes , Bankitalia in the lead). The future cannot belong to bloated entities, which have always been difficult to govern. Banking organizations that are too large configure companies that are risk-prone and impossible to fail. Instead; we must focus on lean, medium-sized banks, suitable for dialogue with our beautiful entrepreneurship. Instead of mergers, it is necessary to focus on "divisions" of existing bodies, which are capable of developing themselves and the territories in which customers operate. Agile banks, also suitable for applying new technologies. And that they push away the specter of mass layoffs. ”

The decision of the Agcm sinks the blow on the whole structure of the operation that had been developed by Intesa with the synergy of Bper and Unipol. In fact, the Antitrust Authority also believes that the agreement for the sale of a business branch to Bper cannot be "taken into consideration as an intervention aimed at resolving competitive problems".

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Here is the Start Magazine article of 13 May on the launch of the investigation by the Agcm

The Ops (public exchange offer) launched by Intesa Sanpaolo on Ubi Banca? An operation that, if successful, would radically change the Italian banking landscape, consolidating the leadership of Intesa, which would encompass the fourth national group, crushing the ambitions of the third credit pole in Italy, and would end the "substantial symmetry" with Unicredit, the other major bank in the country.

This is what emerges from the resolution with which the Antitrust yesterday announced the launch of an investigation to "verify the possible effects on the competitive dynamics in the banking, financial and insurance markets, national and local" of the Understanding Ops on Ubi, also in the wake of the "observations" – a kind of complaint – that the bank led by the ad, Victor Massiah, has sent the AGCM.

WHAT READS IN THE INTESA-UBI ANTITRUST RESOLUTION

The acquisition of Ubi by Intesa – reads in the resolution of the Guarantor of the market and of the competition – is able to "significantly" change the banking context "from two points of view". On the one hand, depriving the system of "a medium-sized operator such as Ubi, which in a not distant future could have acted as an aggregation pole, constituting a third large banking group" alongside Intesa and Unicredit. On the other, there is no longer "substantial symmetry" between Intesa and Unicredit, with the "important growth" of the former. This is what the antitrust finds.

TRADE REVENUES ACCORDING TO AGCM

"For both profiles, in the preliminary phase, it will be possible to make prospective considerations in terms of competitive effects", reads the provision with which the Authority for the protection of competition resolves to start the preliminary investigation on the possible concentration between Intesa and Ubi.

THE INTERESTED SECTORS

The Antitrust Authority notes that "the transaction in question affects a plurality of markets included in the traditional banking, managed savings, administered savings, consumer credit, leasing, factoring and payment instruments, investment banking sectors and insurance ".

GDF ACTION

The Guarantor yesterday announced the launch of an investigation in order to "verify the possible effects on competitive dynamics in the banking, financial and insurance markets, national and local", after that day he had sent the men of the Guardia di Finanza to acquire documentation in the offices of Ca 'de Sass, Ubi and of the Intesa, Mediobanca advisor.

THE TIMING

The procedure must be completed within a maximum of 60 working days, therefore by the end of July. Only then, and in the presence of the authorizations of the other authorities involved, Consob will be able to give a green disc to the publication of the prospectus on which Ubi's board of directors must then formally express itself with the issuer's statement. It is therefore possible that the offer takes longer than what was estimated by Intesa who, as also recently declared by the CEO Carlo Messina, said she was confident "to complete the offer by August 2020".

MARKET QUOTAS

The numbers indicated by the Guarantor resulting from the merger in the lending sectors are significant. Here are 4 highlights

"In particular, with reference to the employment market for consumer families , in the provinces of Monza-Brianza, Viterbo, Teramo, Cosenza, Como, Taranto, Campobasso, Terni, Aosta, Avellino, Perugia, Alessandria, Imperia, Arezzo, Vibo Valentia, Naples, Potenza, Savona and Matera the post-merger share of ISP will be between 35% and 40%; in the provinces of Macerata, Isernia, Ancona, Chieti, Reggio Calabria, Barletta-Andria-Trani, Novara, Prato, Brindisi, Pavia, Ascoli Piceno, Fermo, Cagliari, Caserta, Lecco, Foggia, Brescia and Bari, following the outcome of the operation ISP will hold a share between 40% and 50%; in the provinces of Varese, Rieti and Bergamo ISP will exceed 50%, with peaks above 60% in Pesaro and Urbino and Verbano-Cusio-Ossola.

With regard to the market for loans to small-scale producer families , the post-merger share will be between 35% and 40% in the provinces of Naples, Pesaro and Urbino, Brindisi, Ancona, Perugia, Chieti, Barletta-Andria. -Trani and Foggia; will exceed 40% in the provinces of Isernia, Ascoli Piceno, Macerata, Cagliari, Pavia, Caserta, Bergamo, Reggio Calabria, Novata, Prato, Rieti and Fermo; will exceed 50% in the provinces of Varese and Verbano-Cusio-Ossola.

As far as the market for loans to medium-large enterprises is concerned , it has a territorial dimension assessed as a first approximation at the regional level, given the greater mobility of these subjects compared to the previous segments of demand. In this regard, ISP will come to hold a significant postmerger share in different Regions, positioning itself between 35% and 40% in Calabria, Sardinia, Umbria and the Marche, and over 50% in Piedmont.

The aggregate share of the Parties in the distribution of mutual funds , based on the estimates provided by ISP, will be significant in various provinces, as shown below. In particular, the post-merger share will be between 35% and 40% in the provinces of Como, Viterbo, Cuneo, Monza-Brianza, Alessandria, Catanzaro, Aosta, Rieti, Turin, Milan, Chieti and Imperia; it will be more than 40% in the provinces of Bergamo, Varese, Novara, Prato, Verbano-Cusio-Ossola, Macerata, Pesaro and Urbino, Brindisi, Brescia, Pavia, Ancona, Arezzo and Florence ".


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ops-intesa-bper-ubi-antitrust/?utm_source=rss&utm_medium=rss&utm_campaign=ops-intesa-bper-ubi-antitrust on Tue, 09 Jun 2020 17:00:38 +0000.