Breakingviews - Andrea Orcel's Greek venture offers attractive rewards

Written by Emily J. Thompson, Senior Investment Analyst

Source: Reuters

Updated: Aug 29 2025

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Source: Reuters

UniCredit's Strategic Moves in Greece

Merger Attempts and Government Opposition: UniCredit's CEO Andrea Orcel faced challenges in merging with competitors in Italy and Germany due to government resistance. However, a 26% stake in Alpha Bank, a smaller Greek lender, presents a lucrative and less contentious opportunity.
Background of Investment: UniCredit's interest in Alpha Bank dates back to before its failed attempts to acquire Banco BPM and its controversial stake in Commerzbank. The Greek deal, which includes a partnership and a merger of Romanian businesses, is progressing positively.

Financial Performance and Projections

Investment Returns: UniCredit's 26% stake in Alpha Bank, with over half held in derivatives, is projected to yield a return on investment of around 20%. This is attributed to the initial purchase of a near-10% stake when Alpha's stock was undervalued.
Revenue Opportunities: Alpha Bank serves as a significant distributor of UniCredit's fund products in Greece, enhancing revenue through trade finance, currency, and investment banking services for Greek companies.

Potential for Full Acquisition

Valuation and Costs: Acquiring the remaining 74% of Alpha Bank could cost approximately 7.1 billion euros, based on current valuations. This includes the initial 1.2 billion euros for the existing stake and potential cost savings of around 150 million euros.
Projected Returns: Analysts forecast that post-tax returns could exceed 1.1 billion euros by 2027, aligning with Orcel's 15% M&A return target, despite accounting for integration costs of 300 million euros.

Favorable Conditions for Acquisition

Government Support: Unlike previous merger attempts, the Greek government has welcomed UniCredit's investment, reducing the likelihood of regulatory hurdles.
Market Position: With three larger banks in Greece, there is minimal concern over excessive foreign control, positioning UniCredit favorably for a potential acquisition without significant competition from rival lenders.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.