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Intesa gains Italy's antitrust approval for UBI deal

Credit: REUTERS/STEFANO RELLANDINI

Italy's Intesa Sanpaolo on Thursday secured antitrust approval for its takeover bid for rival UBI Banca, overcoming a major hurdle to one of Europe's biggest banking mergers in a decade.

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MILAN, July 16 (Reuters) - Italy's Intesa Sanpaolo ISP.MI on Thursday secured antitrust approval for its takeover bid for rival UBI Banca UBI.MI, overcoming a major hurdle to one of Europe's biggest banking mergers in a decade.

The antitrust body said a pledge by Italy's second biggest bank to sell more than 500 branches was enough to address concerns the acquisition would strengthen Intesa's dominant position on several local markets.

To win antitrust approval, Intesa has agreed to sell 532 branches to BPER Banca EMII.MI if the bid goes through, expanding an initial accord to sell 400-500 branches.

It has also promised to sell another 17 branches to another peer within nine months if necessary.

The regulator did not disclose the deadline for the disposals. It said Intesa had to be ready to sell its own branches if it couldn't sell UBI branches.

"In authorising the deal, the authority has imposed some structural remedies to resolve concerns that surfaced during the investigation over potential harm to competition," the authority said. "Intesa must sell more than 500 branches, a much higher number than it had originally offered."

On July 6, Intesa formally launched an offer to exchange 1.7 newly-issued Intesa shares for each UBI stock.

As of Thursday, take-up stood at 3% of UBI's capital. The offer runs until July 28 and shareholders are expected to wait until the very last few days to decide.

UBI has rejected the bid as inadequate, saying it does not reflect its "fundamental value".

A take-up of 50% of UBI's capital plus one share is necessary for the bid to succeed but acceptance of 66.7% would guarantee Intesa controls extraordinary shareholder resolutions.

Low take-up may complicate Intesa's plan for branch disposals, which would mostly be UBI's, because minority shareholders may challenge the move if Intesa lacked the necessary majority to incorporate UBI.

(Reporting by Valentina Za and James Mackenzie; Editing by Elaine Hardcastle)

((valentina.za@thomsonreuters.com; +39 02 6612 9526;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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