potential partnership between Unicredit and Generali: a step towards success or a path to disaster?
Italy's banking landscape has been a turbulent sea, with regular mergers, acquisitions, and takeover intentions making waves. This week, Milan-based Unicredit stirred up the waters with a move that has even left the bigger sharks uneasy. Unicredit is not only vying for control of Commerzbank and the third-largest Italian bank, BPM, but has also secured a significant stake in Italy's largest insurer, Generali.
The bank acquired a 4.1% direct stake in Generali and another 0.6% via financial instruments, Unicredit announced. CEO Andrea Orcel quickly clarified that Unicredit had no plans to acquire Generali strategically, assuring that the investment was purely financial in nature.
A New Chapter in the Insurance Sector
Unicredit's foray into the insurance sector is adding a new dimension to Italy's financial dealings. Rumors have been circulating in Italy for some time about potential mergers leading to a multifunctional financial giant, potentially involving MPS, Mediobanca, and Generali. The Meloni government is also said to be interested in creating such an entity, which could assume a dominant role in Europe's financial sector and bolster the international standing of Italian industrial conglomerates.
A Step Back in Time
This bank-insurance merger revives memories of the all-finance concept, which gained traction over two decades ago. The high point was reached in 2001 with Allianz's takeover of Dresdner Bank, aiming to blend bank and insurance under a single corporate roof. The goal was to leverage the resulting synergies and cost savings.
However, Allianz did not find the success it expected, and the bank became a burden. In 2008, the significantly downsized "Dresdner" was set to be sold to Commerzbank, but the timing was disastrous. Two weeks after the takeover announcement, US investment bank Lehman filed for bankruptcy, triggering the 2008 financial crisis.
The Road Ahead for the All-Finance Concept
Is the Italian all-finance concept therefore destined to fail from the outset? Banking expert Hans-Peter Burghof suggests that all-finance concepts struggle due to the difficulty of creating meaningful sales incentives for disparate products. Yet he believes that the age of digitalization could make all-finance concepts worth revisiting.
The full analysis of Unicredit's Generali participation, its implications for Commerzbank, and the ongoing systemic risks posed by Italian banks can be found in the current issue of Euro am Sonntag. The publication offers thoroughly researched analyses, background reports, and precise assessments to help readers understand the evolving dynamics in the financial world and financial policy. In addition, digital subscribers receive an exclusive Sunday update with essential additions and market insights, including closing stock exchange prices and an overview of the most traded derivatives of the week. Subscribe now to stay informed and make informed investment decisions.
Unicredit's investment in Generali signals a new chapter in the insurance sector of Italy, potentially leading to the creation of a multifunctional financial giant. This move recalls the all-finance concept, which aimed to blend bank and insurance under a single corporate roof, as seen with the takeover of Dresdner Bank by Allianz two decades ago.
