UniCredito has officially confirmed the finalisation of the first step of the agreement between the investor and Polish government, which came as the amendment to the Polish banking law, permitting de-mergers of banks by spin-off. UniCredito has repeated that it intends to integrate its banking business in Poland through the de-merger of Bank BPH by spinning off part of its assets to Bank Pekao in exchange for shares in Bank Pekao to be issued to the shareholders of Bank BPH.
On Friday representatives of UniCredito and State Treasury Ministry have met to discuss next steps and progress of the transaction. As a next step UniCredito will submit the list of assets for sale to the State Treasury Ministry (with January 19 deadline). Then the implementation of the integration process will require the relevant corporate bodies of both Bank BPH and Bank Pekao to follow the procedures set forth in the Polish law.
Our view: By restricting the list of potential branches for sale to those currently owned by Bank BPH the level of merger synergies is reduced, which has negative implications for the combined value of the two banks. However, we expect a high level of interest from international banks in the assets sale, which should lead to a high price and provide an offset for Bank BPH shareholders. In order to fully asses the level of potential merger synergies, the market must wait for the list of assets for sale. We do not expect any major stock price reaction on the back of this official confirmation.