July 12 EST: UniCredit just bought itself some breathing room. In a closely watched decision, an Italian administrative court threw out two key restrictions Rome had slapped on its €16 billion bid for Banco BPM but left the most politically sensitive demand untouched: the bank still has to get out of Russia.
Conditions Loosen, But One Line Holds
The court sided with UniCredit on financial grounds, ruling that Italy’s demand to lock in Banco BPM’s loan-to-deposit ratio for five years post-acquisition made little economic sense. It also scrapped a limitation on project finance operations, which had threatened to tie the hands of the merged bank in sectors like energy and infrastructure lending.
Those wins give UniCredit more strategic flexibility and remove some of the red tape that investors had worried would cripple integration. The ruling effectively tells Rome: you can’t micromanage how a bank runs its balance sheet just because you don’t like the optics of a deal.
But on the matter of Russia, the court didn’t blink.
Russia Exit Isn’t Just Political, It’s Structural
UniCredit is still on the hook to exit Russia a condition the court upheld as “totally legitimate,” given current sanctions and national security concerns. That’s not an easy box to check. The bank still operates a local subsidiary there, and full withdrawal requires Russian regulatory approval, which is anything but guaranteed.
This isn’t just a political headache. It’s a structural one. As long as UniCredit’s Russian operations are in limbo, so is its deal for Banco BPM. That’s the part that keeps lawyers and compliance chiefs up at night not the loan ratio minutiae.
The Broader Chessboard: Golden Powers, EU Scrutiny
The original constraints were part of Italy’s use of “golden powers”, an emergency lever designed to shield strategic sectors like banking from foreign or unwelcome takeovers. In April, Rome used that authority to try and slow-roll UniCredit’s bid, citing everything from systemic risk to national credit access.
Banco BPM didn’t exactly roll out the red carpet either. It labeled UniCredit’s proposal hostile, and talks cooled. UniCredit, for its part, pulled an earlier emergency appeal to suspend the conditions in June, signaling it was willing to keep talking with the Economy Ministry rather than escalate too quickly.
Now, after today’s ruling, the power dynamics shift slightly. UniCredit has more leverage but not a free pass.
Market Moves and Merger Math
Markets picked up on the change in tone even before the court weighed in. Both UniCredit and Banco BPM shares rose this week on reports that EU regulators were eyeing Italy’s restrictions with skepticism. Brussels hasn’t taken official action, but it’s watching closely especially as some of the conditions Rome imposed look more like protectionism than prudence.
From a market standpoint, today’s ruling simplifies some of the math. Without the loan-ratio cap and the project finance ceiling, the deal becomes more financially viable. It lets UniCredit pencil out a future for the merged entity that’s less constrained by artificial ceilings—and more responsive to commercial reality.
But the Russia clause is still hanging over everything. Until UniCredit can legally and operationally walk away from its Moscow footprint, the acquisition remains a question mark.
Clock’s Still Running
The deadline to finalize the bid was recently bumped from June 23 to July 23, giving UniCredit a few more weeks to clear hurdles and get the necessary regulatory nods. Another extension is possible, depending on how quickly the Russia exit progresses and whether Rome signals it’s done intervening.
For now, UniCredit has the court on its side partially. Whether it can get the Kremlin and the Italian treasury to cooperate is another story entirely.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
