UniCredit, SocGen decline to comment on merger rumor

Mon Nov 14, 2016 6:42am EST
 
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MILAN/PARIS (Reuters) - UniCredit (CRDI.MI: Quote) and Societe Generale (SOGN.PA: Quote) declined to comment on talk of a possible merger between them after their shares rose on speculation about a tie-up.

Rumors about a possible merger between the French and Italian banks have been doing the rounds for several years and have re-emerged after Jean-Pierre Mustier, a former investment banking boss at SocGen, was appointed earlier this year to run UniCredit.

This was highlighted on Monday by a report from Italian news agency Ansa which said talk of a tie-up was circulating in financial markets.

"It's market speculation that the bank does not intend to comment on," a UniCredit spokesman said when asked about the market rumors.

Societe Generale also said it did not comment on market rumors.

A source inside UniCredit told Reuters recently some managers at the bank believed Mustier's endgame was a tie-up with the French bank.

An investment banker at another bank also mentioned such a scenario. This banker said Mustier, who is expected to launch a share issue in the first quarter of next year, would likely raise more than the bank needed to increase its market capitalization with a view to a SocGen deal.

Such a tie-up could take place 12-18 months after the share sale, the banker said.

Two other sources close to the situation said a tie-up between the two banks was unlikely because of regulatory and constraints.   Continued...

 
The headquarters of UniCredit bank is seen in Milan, Italy, in this February 8, 2016 file photo. REUTERS/Stefano Rellandini