UniCredit: Banco BPM Seems a Clearer and More Compelling Option Than Commerzbank

Three months after UniCredit announced it was building a stake in Commerzbank, it made a EUR 10 billion all-share offer for its Italian rival, Banco BPM. We are more supportive of the BPM proposal than a possible takeover of Commerzbank. We think the cost-saving potential of the BPM deal is more substantial, we like the asset- and wealth-management capabilities that UniCredit will acquire, and we view Italy as a more attractive banking destination than Germany.