Italy’s biggest bank, UniCredit SpA is exploring a merger with France’s Societe Generale SA in a move that would see the European banks leading the way for banking mergers on the continent, the FT said on Sunday.
UniCredit’s French chief executive, Jean-Pierre Mustier, a former head of SocGen’s investment banking unit, has been developing the idea for several months now, the FT said, citing sources.
Although no formal approach has been made, SocGen directors have also been exploring the possibility of a combination, according to the newspaper.
Senior executives representing both parties stressed planning was at an early stage, the FT said, and that Italy’s volatile political situation caused a delay in the timetable for a deal from the original plan of 18 months.
On Sunday, SocGen denied “any board discussion regarding a potential merger with UniCredit”, according to an emailed statement to Reuters.
UniCredit declined to comment on the FT report, while saying their ‘Transform 2019’ turnaround plan is based on “organic assumptions”.
SocGen has been at the center of speculation over merger talks with UniCredit, while more recent takeover talk within the European banking industry has centered on Germany’s Commerzbank AG.
Societe Generale Chief Executive Frederic Oudea said in November last year that cross-border bank deals in Europe were unlikely over the coming quarters, adding that the bank’s new three-year strategy would put it in a strong position for mergers when the time came.