MILAN (Reuters) -Shares in Italy's second biggest bank UniCredit and its takeover target Banco BPM rose on Tuesday on a media report that said Brussels will order the Italian government to withdraw
UniCredit and BPM Shares Rise as Italy May Drop Merger Conditions
MILAN (Reuters) -Shares in Italy's second biggest bank UniCredit and its takeover target Banco BPM rose on Tuesday on a media report that said Brussels will order the Italian government to withdraw the conditions it has put on the deal.
UniCredit has said the deal cannot go ahead unless the conditions are changed and has taken the government to court to try to overturn them, with a decision expected this week.
Rome says it has the right to set conditions on the deal because it falls within its national security remit.
The conditions include giving UniCredit nine months to cease activities in Russia and asking it not to reduce BPM's loan-to-deposit ratio for five years.
However, Bloomberg cited sources familiar with the matter on Tuesday as saying that European Union regulators were about to rule that Rome has no right to intervene in the deal.
Italian daily la Repubblica, meanwhile, said on its website that the EU decision could come as early as Tuesday.
The European Commission could not immediately be reached for comment. The Italian government did not immediately respond to a request for comment.
Bloomberg said the Commission would say that under EU merger rules only Brussels has legal powers to impose conditions on the deal, which secured EU approval last month.
Bloomberg said a failure to withdraw the conditions could lead to proceedings against Italy for breaching EU law.
At 1125 GMT, UniCredit shares were up 2.4% and BPM's were up 4%.
(Reporting by Valentina ZaEditing by Mark Potter)
