Unipol breaks into the risk, for brokers with Mps breakthrough on bancassurance

 (Il Sole 24 Ore Radiocor) - The company Unipol enters as a protagonist in the Italia risk and aims at the maxi-merger between over 600 Mps and Bper branches to create the second banking pole. For Barclays analysts, this is 'a potentially transformative transaction' for Unipol, which will thus 'significantly strengthen its distribution network and further boost it, creating a major new operator in Italia'. And although the transaction is complex, it is expected to generate 'increased profits in the medium term and a more solid competitive positioning'. Barclays thus seems to be promoting the operation with flying colours and reasoning, in particular, on the future spread of policies: for Unipol, it says, 'the implications are structurally significant and align closely with its established bancassurance strategy'.

The most immediate impact is that of a "radical change in distribution capacity, as the acquisition adds an extensive branch network through which Unipol can distribute its insurance products, supporting premium growth over time". At the same time, the transaction "strengthens Unipol's exposure to the banking sector, accelerating the transition to a more diversified financial services group, where banking business contributes more significantly to profits".

Equita's experts, without assuming any synergy, estimate that "the transaction would be accretive to Unipol's earnings per share by approximately 14%/15%", while they expect it to be "slightly dilutive on the dividend per share front" (in the "mid-single digit" area). In any case, the broker concludes, the transaction would allow Unipol-Bper to further strengthen its competitive positioning", with the two companies "characterised by an excellent track-record in terms of integration and business growth".