UniCredit's bid for BPM also throws a spanner in the works for Italy's government, which had advanced plans for a merger of BPM with rival Monte dei Paschi di Siena which it saw as strengthening its banking sector without harming competition.

The Italian Treasury on Friday denied drafting an emergency decree to counter UniCredit’s takeover bid for smaller rival Banco BPM after the Financial Times reported Rome was considering this option.

UniCredit SpA has hired Deloitte LLP to advise Italy’s second-biggest bank on its takeover bid for Banco BPM SpA, people familiar with the matter said.