Monte dei Paschi di Siena has approved plans to launch separate bids for Banco BPM and wealth manager Banca Generali in a combined transaction valued at approximately €34 billion, escalating Italy’s wave of financial sector consolidation.
The board of Italy’s oldest bank approved the dual acquisition strategy on Thursday, according to people with knowledge of the matter. The move positions Monte Paschi to create a sprawling financial group spanning retail banking, wealth management, and insurance distribution across the country.
Funding the Mega-Deal
Monte Paschi is weighing the sale of Mediobanca’s roughly 13% stake in insurer Assicurazioni Generali, reportedly worth about €7.4 billion, to help finance the bid. The Financial Times reported that potential buyers could include Intesa Sanpaolo and UniCredit, two of Italy’s largest banks.
Giuseppe Castagna, the CEO of Banco BPM, said that from an industrial standpoint he would not be unhappy as a shareholder if Monte Paschi came to own Banca Generali. To own a wealth manager of that scale can only add industrial value.
The proposed Banco BPM bid comes as Monte Paschi seeks to counter a €36 billion offer from Intesa Sanpaolo. Banco BPM itself had earlier proposed a merger of equals with Monte Paschi that would create Italy’s second-largest banking group with a market value exceeding €50 billion.
European Banking Consolidation Accelerates
The deal would generate more than €1.1 billion of pretax synergies, including over €650 million in cost savings and more than €450 million in revenue synergies, according to Banco BPM’s earlier analysis of a combination. The complementary geographic footprints of the two lenders would limit execution risk, the bank said.
The Italian banking sector has been at the center of an intense round of deal-making, with Monte Paschi pursuing Mediobanca, Banco BPM acquiring asset manager Anima Holding, and UniCredit unsuccessfully attempting to buy Banco BPM while also pursuing Germany’s Commerzbank. The Italian government has played an active role in shaping outcomes, indirectly backing Monte Paschi’s Mediobanca bid while imposing conditions that led UniCredit to withdraw its Banco BPM offer.
The sweeping consolidation push reflects a broader European trend toward larger, more diversified financial groups. Regulators are watching closely as clustered mega-deals raise questions about competition, systemic interconnection, and the future shape of the continent’s banking landscape.
Sources: Bloomberg; Reuters; Financial Times; Finimize
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