Big bank merger speculation - deal thought unlikely

'It would be too complex in the current regulatory environment'.

UniCredit is considering raising as much as $14bn, according to press reports, with one news agency saying that there’s speculation about a merger between the lender and Societe Generale.

Bloomberg News reports that the bank will probably decide on the timing of the capital increase after the results of Italy’s constitutional referendum next month, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Italy’s Ansa said on Monday that a merger between the two banks is circulating widely in financial circles, without elaborating. Officials for UniCredit and Societe Generale declined to comment.

UniCredit CEO Jean Pierre Mustier is under pressure to boost capital buffers and reverse a slide in shares that has eroded more than half the company’s market value this year. The bank, which is set to present a new business plan on December 13, is considering raising at least $5.4bn through a share sale and converting $3.2bn of subordinated hybrid equity-linked securities, people familiar with the matter have said.

“Such a merger is very unlikely, as it would be too complex in the current regulatory environment,” said Wolfram Mrowetz, chairman of Alisei SIM, a Milan brokerage. “Uncertainty will weigh on the shares until the plan is unveiled and the amount of the share sale defined.”

To access the complete Bloomberg News article hit the link below:

UniCredit Reported to Plan Raising $14 Billion in Stock Sale

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