UniCredit builds stake in Generali, further complicating fight for Italian financial sector

ROME — Italy’s UniCredit said on Sunday it has built a stake of 4.1 percent in insurance and asset management giant Generali Group, adding another twist to a highly politicized battle over control of the country’s financial sector.

The Milan-based bank said it also holds another 0.6 percent of Generali on behalf of clients and their related hedging activities. It said its holding is “a pure financial investment” that would not affect its balance sheet strength, and asserted that it has “no strategic interest in Generali.”

However, its move adds an extra layer of complexity to an already confusing power struggle over Italy’s biggest banks and asset managers, in which the government of Giorgia Meloni appears to be pushing the creation of a “third pole” to rival UniCredit and Intesa Sanpaolo with the help of some sympathetic local billionaires.

The government is keen to ensure that Generali, which last month agreed to combine its asset management business with that of France-based Natixis, keeps its appetite for Italian sovereign debt at a time when Rome needs to borrow nearly €1 billion a day. The Trieste-based conglomerate is the government’s largest private-sector creditor.

Rome had initially pushed for an alliance between Banco BPM, a Milan-based lender, and Banca Monte dei Paschi di Siena (MPS), which the government is still in the process of privatizing after years of restructuring. That intention was frustrated last year when UniCredit made a formal offer for all of BPM. UniCredit said on Sunday that it remains committed to that deal, and to developing its relationship with Germany’s Commerzbank.

Rome is now throwing its support behind a bid by MPS for Mediobanca, a Milan-based merchant bank that has historically catered to some of the country’s biggest business empires. Mediobanca is also Generali’s biggest shareholder, with a 13.1 percent stake. Italian media have reported that the Del Vecchio and Caltagirone families, which hold just under 10 percent and 7 percent of Generali, respectively, want to increase their influence at the Trieste-based insurer.

A person familiar with the matter said that while the purchase of a stake by UniCredit was not an explicit attempt to exert leverage in the billionaires’ tussle over Generali, it will have an “interesting” effect at a coming board meeting. The same person noted that UniCredit had started snapping up Generali shares before MPS’s move on Mediobanca.

People familiar with the matter told POLITICO that UniCredit had built its stake via derivatives, gaining economic exposure to Generali without crossing a threshold for mandatory disclosure. UniCredit declined to comment to POLITICO on that.

Geoffrey Smith contributed reporting.