Italy Would Oppose UniCredit Moving Hq to Germany, Economy Minister Says

Italy would oppose UniCredit moving HQ to Germany, economy minister says

Italy's Stance on UniCredit's Potential Move and Commerzbank Takeover

By Giuseppe Fonte

Government Position on UniCredit's Headquarters

ROME, April 22 (Reuters) - Italy would be against any decision by UniCredit to move its headquarters or other key offices to Germany as part of a takeover of Commerzbank, Economy Minister Giancarlo Giorgetti said, confirming an earlier Reuters report.

Golden Powers and National Interests

Italy has "golden powers" to protect national interests in corporate matters and could use ​them to set conditions on any Commerzbank deal, including preserving registered offices or key management ​functions in Italy, sources have said.

Minister Giorgetti's Comments

"Obviously we would not be in favour of that," Giorgetti said, when asked about the prospect of UniCredit becoming more German.

He added, however, that the Milanese bank's intention to expand in Germany was viewed favourably by the government.

"We respect UniCredit's plan, it is ambitious. In my view it has an important economic rationale," Giorgetti told reporters at a news conference on Wednesday.

UniCredit's Response and Legal Base Concerns

UniCredit has sought to dispel concerns, saying it has no current plans to shift its headquarters.

"As UniCredit has repeatedly stated, group headquarters are, and will remain, in ‌Italy. There ⁠have not been any discussions or indeed requests to the contrary," a spokesperson said on Wednesday after Giorgetti's comments.

Legal Base as a Stumbling Block

The question of ⁠the group's legal base has long been a stumbling block and is widely expected to surface in the talks UniCredit has said it wants ​to open in the bid for its German rival.

A person involved in a previous ​attempt by UniCredit to acquire Commerzbank said the location of a lender's ​legal base mattered ⁠because it gave governments greater confidence they could exert pressure in times of difficulty.

Internal German Office Locations

Giorgetti said the location of offices was also an issue within Germany, pitting Munich, where UniCredit's HVB unit is based, against Frankfurt, where Commerzbank is headquartered.

Broader Implications and EU Involvement

Germany is UniCredit's biggest foreign market and its weight would increase sharply if the Commerzbank deal went ahead.

Italy last year used its golden powers to set conditions for UniCredit's bid for domestic rival Banco BPM, a deal whose failure UniCredit blamed on the government.

Dispute with Brussels and EU Competition Authorities

Those powers are now at the centre of a dispute with Brussels, which is keen to promote the single market and cross-border banking deals.

EU competition authorities have opened an infringement procedure against Italy, challenging its claim that it can vet banking mergers on national security grounds.

(Reporting by Giuseppe Fonte in Rome, additional reporting by Valentina Za in Milan, editing by Alvise Armellini and Gavin Jones)