Bank M&A fever grips Europe as Société Générale discusses merger with UniCredit

A WAVE of bank mergers across Europe are expected to follow from news that Italy’s biggest bank is in talks to combine with France’s Société Générale.

SocGen, which has more than 4000 UK staff, most of them in the City of London, has been considering a tie-up with UniCredit for some time. Political turmoil and economic weakness in Italy have delayed a formal move, but reports suggest it is now strongly on the cards.

Bank analysts say both lenders need a deal. Last night SocGen denied “any board discussion regarding a potential merger with UniCredit”.

Bank sources, repeating an earlier report in the Financial Times, say that UniCredit’s French chief executive Jean Pierre Mustier has been chasing the merger plan for many weeks.

SocGen bosses are keen on the idea, but have yet to make a formal approach.

It is not clear what a deal would mean for London staff, but the main point of the merger would be to boost the combined group’s operations in Europe.

The banks are similar in size, with UniCredit worth about €33 billion (£29 billion) and SocGen €32 billion.

Mustier is a former SocGen executive, said to have been annoyed at never landing the top job as chief executive. He earlier pondered a bid for Commerzbank.

A deal would put pressure on others to follow suit. The resurgence of Wall Street under the Trump administration has left smaller European banks in need of greater access to capital in order to compete.