Generali takeover bid collapses

After weeks of speculation, the potential mega-deal involving Generali is off the table after Italian banking giant Intesa Sanpaolo abandoned its plans to partner with the heavyweight insurer.

 

In a new statement, Intesa said its management had completed reviewing options relating to possible “industrial combinations” with Generali. It was found that the bank’s shareholders would not benefit from a possible tie-up with the insurance giant.

 

Intesa said: “In the light of the analyses on the insurance group carried out on the basis of information currently available to the public, the management sees no opportunities that fulfil the criteria - in terms of creation and distribution of value for the bank’s shareholders, in keeping with the objective of maintaining a leadership position in capital adequacy - against which it examines options for the Group’s internal and external growth on a regular basis.”

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The Italian bank said it would instead seek to grow “organically” in line with its 2014-2017 business strategy. This includes the planned “significant development” of Intesa’s non-life insurance business by raising the product penetration with the customer base through synergies with bank networks.

 

Intesa first revealed in January that it was examining potential deals with Generali. According to a previous report by the Financial Times, the bank’s chief executive, Carlo Messina, told investors that he was seeking a “friendly merger” and that he wanted to approach both the insurer and its core investors.

 

Generali, on the other hand, has made moves to fend off Intesa’s planned takeover, including the recent acquisition of a 3% stake in the Italian bank. The insurer is also reportedly planning to raise its cost-cutting target to 6% or 7% as to convince shareholders to back its independence.