As Barclays slugs it out with Royal Bank of Scotland for ABN Amro, the focus of consolidation in the continental European banking sector switched to Italy yesterday.
Milan-headquartered UniCredit will acquire smaller rival Capitalia for more than £14.6bn after the boards of both banks met yesterday to approve a deal to create Europe's second-biggest bank by market value.
The takeover enables the new UniCredit, with a combined market capitalisation of more than £68bn, to expand on its home turf to challenge bigger domestic rival Intesa Sanpaolo and gives it a retail banking network stretching from the southern island of Sicily to eastern Europe.
UniCredit will have about 9200 bank branches globally, roughly e960bn (£655bn) in assets and 40 million customers from Italy to Russia. Outside its homebase, it will rank third-biggest in Germany and the largest in eastern Europe.
The new group is expected to be run out of Milan but have its legal headquarters in Rome.
Capitalia chief executive Matteo Arpe, who spearheaded a turnaround at the bank but locked horns over strategy earlier this year with its influential chairman, Cesare Geronzi, has resigned, Capitalia confirmed in a statement.
Geronzi will become vice- chairman, while UniCredit's chief executive, Alessandro Profumo, and chairman, Dieter Rampl, will retain their titles.
Capitalia, viewed as among the last few avenues left to enter Italy's lucrative banking market, had been eyed by a number of foreign banks - including ABN Amro. However, analysts said the Dutch bank's own potential takeover gave UniCredit a chance to capture the Roman bank a year-and-a-half after buying Germany's HVB.
Barclays, meanwhile, is today expected to reveal that it has made key filings with British and Dutch regulators as it seeks to take the back the initiative in the battle for ABN Amro.
Documents detailing the structure of the deal are understood to have been lodged with the UK Financial Services Authority and the Dutch Central Bank.
Barclays will say it is making good progress in filings with 106 regulators in 53 countries and that it will complete the process by the end of the month.
The timescale should allow Barclays to launch its offer document in early July, once the Dutch Supreme Court rules on an appeal by ABN Amro against an earlier judgment that froze the £10.6bn sale of LaSalle, the US bank, to Bank of America. That deal is viewed widely as a "poison pill" aimed at fending off the rival Royal Bank-led consortium.
The move comes as the consortium prepares to launch a counterbid for the Dutch bank that could be unveiled as early as this week.
Royal Bank and its partners, Belgian bank Fortis and Spain's Santander, have seven days in which to make a statement clarifying their plans.
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