Intesa Sanpaolo Confirms It Is Assessing Potential Tie-Up With Assicurazioni Generali--Update

By Giovanni Legorano

ROME -- Italian bank Intesa Sanpaolo SpA said Tuesday it assessing a potential tie-up with Assicurazioni Generali SpA, as part of its strategy of growth in the insurance, asset management and private banking sector.

Intesa's statement follows two days of market speculation about its interest in Europe's third largest insurer, after Italian daily La Stampa first reported on Sunday it was considering an investment in Generali, possibly in partnership with German insurer Allianz.

Allianz couldn't immediately be reached for comment on Tuesday, but had previously declined to comment on La Stampa's report. Generali declined to comment.

Intesa said that in line with its strategy its management normally assesses opportunities to strengthen its competitive position and its financial performance.

"These opportunities, including possible industrial combinations with Assicurazioni Generali, are currently being examined by the bank's management," Intesa said in a statement.

A tie-up between the two companies would create Italy's largest financial conglomerate and could potentially incur into antitrust issues as Intesa already owns large insurance and asset management businesses.

Many analysts showed skepticism about such a deal.

"A potential transaction...could be complex and raise antitrust issues [given ISP activities in life insurance], and we deem it as unlikely at current stage," Citi's analysts wrote in note earlier Tuesday.

In a defensive move against a potential takeover bid by Intesa, Generali said late Monday it bought voting rights worth 3.01% of lender Intesa's share capital.

According to Italian regulations and under certain conditions, a listed company can't hold more than 3% in another listed company's voting rights if the latter already owns voting rights equal to more than 3% of the former company's share capital.

This means that if Intesa bought a stake in Generali larger than 3%, the voting rights corresponding to the exceeding capital would be frozen. In addition, Intesa would have to sell the exceeding shares within 12 months.

Intesa could avoid these restrictions if it launched a takeover bid for at least 60% of Generali's capital.

Shares in Generali soared on Tuesday, ending up 8.2%, while those in Intesa dropped 4.4%.

William Wilkes contributed to this article.

Write to Giovanni Legorano at giovanni.legorano@wsj.com

(END) Dow Jones Newswires

January 24, 2017 15:58 ET (20:58 GMT)

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