UniCredit’s proposed cost savings could result in reduction of nearly a third of Banco BPM’s workforce. Credit: T. Schneider/Shutterstock.

Banco BPM CEO Giuseppe Castagna has raised concerns over potential job losses in the wake of Italian banking group UniCredit‘s unsolicited takeover bid, reported Bloomberg citing a letter sent to by Banco to its employees.

Earlier this week, UniCredit launched an all-share bid for domestic competitor Banco BPM to consolidate its competitive position and expand its presence within Italy.

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UniCredit offered Banco BPM shareholders 0.175 UniCredit shares for each share held. The offer values each Banco BPM share at €6.657.

However, in a communication to employees, Castagna indicated that UniCredit’s proposed cost savings could result in the loss of over 6,000 jobs, a figure that represents nearly a third of Banco BPM’s workforce.

Castagna’s warning comes a day after the rejection of UniCredit’s offer by Banco BPM’s board, citing the bid as too low and a threat to competition and employment in Italy.

Banco BPM, which employs around 20,000 people, is currently valued at approximately €10.6bn. UniCredit’s offer stands at an estimated €9.5bn.

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The takeover bid also complicates Banco BPM’s recent strategic moves, including its pursuit of asset manager Anima Holding.

Castagna was quoted by the news agency as saying in the letter that the company is “on the right path for growing on our own, rather than becoming the object of operations that do not take into account the value expressed by our bank today and, even more so, in the near future”.

UniCredit’s move was aimed at creating a banking entity capable of competing effectively both in Italy and on the international stage.