MILAN, June 5 (Reuters) - Italian bank Intesa Sanpaolo said on Friday it had received European Central Bank authorisation to take over smaller rival UBI Banca, adding it was waiving a clause that would have allowed it to drop the deal due to COVID-19.
Shortly before coronavirus contagion emerged in Italy in February, Intesa unveiled a surprise all-paper bid for UBI to create the euro zone’s seventh largest banking group, with a focus on insurance and wealth management.
Intesa, which also needs approval from Italian antitrust and market authorities before launching the offer, said the ECB had in the meantime authorised it to acquire a stake of at least 50% plus one share in UBI.
To fend off a legal challenge from UBI to stop the offer, Intesa said it would not include the COVID-19 pandemic among conditions for the offer to be valid.
In doing so, it waived a clause commonly included in acquisition deals, known as ‘material adverse change’, which gives buyers a right to walk away before closing. UBI had said the pandemic meant that clause applied, rendering the offer invalid. (Reporting by Valentina Za; editing by James Mackenzie)