Credit Agricole pitches Banco BPM tie-up in Italy banking shake-up

By Jakob Van Calster and Mathieu Rosemain Mon, November 9, 2026 at 7:52 AM UTC

0

By Jakob Van Calster and Mathieu Rosemain

Nov 9 (Reuters) - Credit Agricole SA said on Monday it had proposed merging its Italian subsidiary with Banco BPM, a move that would create Italy's third-largest bank and deepen the French lender's role in a consolidation wave reshaping the country's financial sector.

The proposal would lift Credit Agricole's stake in the combined entity to about 45% from 29.6% and comes amid a frenzy of dealmaking in Italy's banking sector as lenders seek greater scale to fend off rivals and avoid being left behind in a rapidly consolidating market.

Rome has long favoured the emergence of a third national banking group capable of challenging market leaders Intesa Sanpaolo and UniCredit, with Monte dei Paschi di Siena viewed as a key piece in achieving that goal.

Credit Agricole, which called the proposal "friendly", added Banco BPM Chief Executive Giuseppe Castagna would lead the merged group.

The proposal, which has been submitted to Banco BPM's board, includes an exchange ratio reflecting a 20% valuation premium and a €1 billion ($1.1 billion) extraordinary dividend for the Italian bank's existing shareholders, Credit Agricole added. The combined group would generate around €800 million in annual synergies, it said, without elaborating. It would help lift Banco BPM's earnings per share by about 24% in 2027, it said.

Advertisement

The proposal differs from the more conventional approach of offering shareholders a premium to the prevailing market price and may prompt questions from analysts and investors.

The transaction would also need to clear Italy's so-called "golden power" rules, which allow Rome to intervene in transactions deemed strategically important, as well as banking and competition approvals.

Credit Agricole SA, the listed entity of the larger Credit Agricole mutual banking group, has been one of Europe's most acquisitive banks in recent years, expanding its wealth management business, strengthening its presence in Italy and pursuing opportunities in Germany as it seeks to diversify beyond its mature French retail market.

Last week, Castagna said a new transaction between the French and the Italian banks could emerge after Monte dei Paschi shareholders rejected a plan centered on the acquisition of the lender.

The proposed transaction could be completed in the second half of 2027, the lender said.

($1 = 0.8961 euros)

(Reporting by Jakob Van Calster and Mateusz Rabiega, editing by Anna Pruchnicka, Lincoln Feast and Louise Heavens)

Original Article on Source

Source: “AOL Money”