Ripening Italian fruit

2 February 2004 By Rob Cox Follow @rob1cox

Behindthescenes preparations are being made for the mother of all Italian deals, a E40bn merger of Unicredito and Sanpaolo Imi. Until recently, this might have been blocked by the Bank of Italy. But the central bank may be losing its grip on power.

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Gruppo Sanpaolo Imi's largest shareholders are considering changes to the Turinbased bank's corporate governance with the aim of preparing the way for a E40bn merger with Unicredito, another large Italian bank, according to a person familiar with the discussions.

Among the changes being discussed are replacing Rainer Masera as chairman at its April 29 annual general meeting and clarifying the management structure, which now consists of three cochief executive officers. A merger with Unicredito would put the latter's highly regarded chief executive Alessandro Profumo at the helm of the merged entity, the person said.

Sanpaolo's three largest shareholders are: Spanish bank Santander Central Hispano (SCH);and Compagnia San Paolo di Torino, a charitable foundation; and Ifil, an investment vehicle of the Agnelli family, which controls the Fiat industrial group.

Last week, SCH said it raised its stake in Sanpaolo to 8.7% and had permission from banking authorities to go as high as 10%. On Thursday, it emerged that Agnellifamily confidante Franzo Grande Stevens will likely chair the Compagnia San Paolo.

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