UniCredit challenges Italy’s golden power decree in court amid EU concerns

UniCredit lodged an appeal with the Council of State — the supreme administrative court of Italy and the government's main legal advisor — against a ruling by the Regional Administrative Court (TAR) in Lazio, which stopped the bank from acquiring Banco BPM four months ago.

Banco BPM is the third-largest bank in Italy in terms of assets, while UniCredit is the second. A merger between them would have completely reshaped the domestic market and UniCredit claimed it would create massive value for stakeholders.

Banco BPM rejected UniCredit’s initial offer, arguing the price did not reflect BPM’s value and the deal would lead to significant job cuts and dilution of BPM’s geographic footprint — BPM's board deemed the offer hostile and undervalued.

The Italian government intervened, invoking “gold power” rules, a sort of veto intended to protect strategic assets, and insisted on imposing the conditions of the possible takeover.

The government's conditions would have made it difficult for UniCredit's shareholders to support the acquisition of the rival bank.

A clash between the Italian government and the EU?

The "golden power" rule, introduced in Italy in 2012 for military and defence matters and gradually extended to other strategic sectors, has never been used in banking in recent years .

So much so that the EU also took an interest in the case, sending a letter to Rome to verify that the public veto did not violate European regulations.

The Italian government is negotiating and has not yet responded to comments from Brussels, which is due to decide on Thursday on whether to initiate, or further postpone, infringement proceedings against Italy over this matter — namely whether the government had acted out of place by preventing the takeover.

For the time being, the Milanese institution has not made any public comments, but sources close to the operation have stressed that the appeal should not be read as a gesture of escalating conflict with the Italian government — but rather as an attempt to protect UniCredit's reputation and clarify that the bank does not represent a risk to national security.

The length of the judgement in the Council of State, typically one to two years, seems to confirm that UniCredit's appeal is one of principle and not an attempt to reopen the game for BPM.

For his part, the chairman of Banco BPM, Massimo Tononi, declared on Tuesday that he did not know '"what UniCredit's intentions are in the future," reiterating that the main problem in the negotiations was not golden power but that "the offer" itself, and that its financial terms were "clearly inadequate".

What decision is UniCredit challenging?

The ruling on 12 July that UniCredit are challenging validated part of the government’s use of its “golden power” in response to UniCredit’s attempted takeover of Banco BPM.

The first required UniCredit to cease all activities in Russia by January 2026, while the second required it to maintain Italian investments in Anima Holding, the asset management company in which Banco BPM is one of the main shareholders.

The main issue remains that of UniCredit's operations in Russia, considered financially and politically sensitive by the government — a sentiment they have mirrored in the cases of other Italian companies.

Last week the bank's CEO, Andrea Orcel, reiterated his commitment to closing its presence in the country by 2026, explaining that the process has been slowed down by legal and regulatory obstacles imposed by Moscow.

According to the daily Milano Finanza, UniCredit has reduced assets by 90% and employees by 75% since the invasion of Ukraine, but Russia has threatened the nationalisation of the entirety of the bank's assets if it decides to leave the Russian market.

Also on Tuesday, UniCredit was recognised by Crisis Coalition Greenwich, an international financial analysis company of the S&P Global group, as the best financial trading bank in Germany, where it acquired shares in Commerzbank.