Italy Guards UniCredit Amidst Cross-Border Merger Talks

Italy is concerned that UniCredit may move its headquarters to Germany if it merges with Commerzbank. The Italian government is prepared to leverage its 'golden power' to block or set conditions on the merger. UniCredit maintains that its investment in Commerzbank is currently financial and not an indication of a potential relocation.

Italy is increasingly wary of the possibility that UniCredit might transfer its central offices to Germany as part of any merger deal with Commerzbank, government officials have indicated. Citing the 'golden power' rules, Rome expects to have a decisive say in this matter.

Milan-based UniCredit has tried to assuage worries by clarifying there is no cause for shifting its legal base from Italy. The bank insists its stake in Commerzbank is purely a financial investment at this stage. Italian Prime Minister Giorgia Meloni's office has declined to comment.

Golden powers enable the Italian government to set terms on or impede both foreign and local corporate deals, as well as to intervene in governance changes in companies operating in key sectors like energy and banking. UniCredit's recent stake acquisition of 21% in Frankfurt-based Commerzbank sparked speculation, with CEO Andrea Orcel expressing readiness to pursue a full takeover.

(With inputs from agencies.)