Italy's UniCredit looked set to acquire smaller rival Capitalia for more than $29 billion today as the boards of both banks met to approve a deal to create Europe's second biggest bank.
As the boards began deliberations on the all-stock deal, Capitalia's key group of investors which controls about 31 per cent of the Roman lender voted unanimously to back the takeover.
Capitalia's chief executive, Matteo Arpe, who spearheaded a turnaround at the bank but locked horns with its influential chairman over strategy, is expected to resign later today, a source familiar with the situation said. UniCredit will give 1.12 of its own shares for every Capitalia share, according to a document seen by Reuters outlining the terms of the deal.
That values the Roman bank at 8.41 euros per share - worth €21.83 billion - based on UniCredit's last quoted share price of €7.51 before trading was halted on Friday.
Capitalia's Geronzi will become vice chairman of the new bank, while UniCredit's chairman, Dieter Rampl, and chief executive, Alessandro Profumo, retain their titles, the document said. The deal is expected to generate savings of 1.16 billion euros within three years and four members of each bank's board will sit on the other's board during a transition period.
Geronzi will be among the Capitalia board members to sit on UniCredit's board during that period. Arpe's resignation would come barely three months after their public spat that had already nearly cost the younger executive his job. Capitalia's largest shareholder ABN Amro will not be represented on UniCredit's board following the deal. Capitalia announced a news conference for this evening.