By Valentina Za and Giuseppe Fonte
MILAN (Reuters) -An Italian court has backed the government’s order to UniCredit to exit Russia as a condition for its $16 billion bid for rival Banco BPM, while rejecting other conditions for the takeover, according to a ruling published on Saturday.
“There can be no doubt about the properness” of the order to leave Russia, which is “totally legitimate,” the court said in its ruling.
UniCredit was not available for comment.
Following supervisory demands, the bank led by Andrea Orcel has sharply cut its exposure to Russia, but it still runs a local subsidiary and needs approval from Russian authorities to leave the country.
A Treasury official said Rome was satisfied with the ruling, since the court recognised as lawful the order to quit Russia, deemed the most important of the conditions it considered.
Economy Minister Giancarlo Giorgetti pushed to require UniCredit to cease its activities in Russia, apart from payments handled for Western companies, to avoid the risk that savings collected by Banco BPM would benefit Moscow’s economic system.
UniCredit said last month it was likely to withdraw its offer for Banco BPM unless it managed to resolve the legal dispute with the government.
The court also backed a government requirement that UniCredit maintain investments in Italian securities at Anima Holding, a fund manager recently acquired by Banco BPM.
But the court ruled against other conditions set by the government, including that UniCredit should keep Banco BPM’s loan-to-deposit ratio unchanged for five years, and that it maintain both its own and Banco BPM’s project finance portfolios in Italy.
Italy set its terms in April using the government’s so-called “golden power”, which lets it intervene in transactions involving companies deemed strategic.
Opponents say such powers often result in government interference in corporate affairs. The use of the “golden power” to vet bank mergers has triggered scrutiny by European Union authorities, which could open an infringement procedure.
UniCredit in November bid for Banco BPM after the latter became a shareholder in Monte dei Paschi di Siena, fuelling speculation that the government was advancing long-held plans to promote a combination of the two banks.
Banco BPM has rejected UniCredit’s approach as hostile.
(Writing by Francesca LandiniEditing by Sharon Singleton, Tomasz Janowski, Peter Graff)
