UniCredit's bid for Banco BPM raises concerns about the potential impact of the deal on jobs, the banking sector's main union said on Thursday. "There is great concern about the employment fallout that could result from the deal.

The Italian lender rejected the offer from its larger rival, saying it undervalues the bank and creates uncertainty.

UniCredit on Monday launched a €10.1bn takeover bid for BPM, Italy’s third-largest bank, surprising the market and the country’s political establishment.

Banco BPM SpA said the takeover bid it has received from UniCredit SpA wasn’t agreed in advance and isn’t in line with its performance.

The bank blasted what it sees as a weak premium. Its CEO warned a deal would cost BPM 6,000 jobs. And Italian officials expressed concern that a UniCredit tie-up would stall efforts to grow BPM.

Italy reserves the right to use its golden power legislation aimed at shielding strategic assets in regards to UniCredit's plans to take over Banco BPM , Economy Minister Giancarlo Giorgetti said.

UniCredit SpA informed top officials in the Italian government and Banco BPM SpA Chairman about its intention to make a takeover bid for its smaller rival before announcing the move on Monday, people with knowledge of the matter said.

Italian lender UniCredit says its offer for domestic rival Banco BPM is separate from its pursuit of German bank Commerzbank.

Italy's Banco BPM, the target of an unsolicited all-share offer announced by UniCredit, should remain an independent bank, its CEO said in a letter to staff on Wednesday, warning of big job cuts if the deal went through.

ROME, NOV 27 - The CEO of Banco BPM, Giuseppe Castagna, wrote a letter to staff Wednesday saying there would be estimated job losses of at least 6,000 if Italy's second-biggest bank UniCredit succeeds in its hostile takeover bid for the country's third-biggest.