Banks: Crédit Agricole wants to merge Banco BPM with its Italian subsidiary

The Italian banking landscape is facing upheaval. The third largest bank in the country is to be created on the initiative of Crédit Agricole.

Rome. The next merger in the Italian banking sector is coming up. The major French bank Crédit Agricole wants to merge its own Italian subsidiary with Banco BPM and increase its stake in the regional bank based in Milan and Verona to 45 percent from 29.6 percent, as it announced on Monday.

This would create Italy's third largest bank behind Intesa Sanpaolo and Unicredit. Banco-BPM boss Giuseppe Castagna will lead the merged institute. Crédit Agricole attracts the remaining Banco BPM shareholders with a special dividend of one billion euros. The French explained that the merger would also bring around 800 million euros in synergy effects.

The northern Italian regional bank was actually in the sights of Banca Monte dei Paschi (MPS), which wanted to buy it in the fight against the takeover by Intesa. The government in Rome wanted to create a third major banking group and saw MPS in a key role.

But MPS shareholders stopped the takeover plans at an extraordinary general meeting at the end of October. It remains to be seen how Prime Minister Giorgia Meloni's government will react to the French plans. It has the right to intervene in mergers and acquisitions that it considers to be strategically important.

Banco BPM had already aroused desire to take over several times. The bank itself was created in 2017 from the Banca Popolare di Milano and the Banco Popolare from Verona. Two years ago, Unicredit made a ten billion euro takeover offer for the merged bank, but later withdrew it.

Crédit Agricole is on a purchasing spree across Europe because the Paris-based institute wants to become less dependent on its branch business in France. In Germany, the French are currently reaching for the Düsseldorf-based medium-sized bank IKB.

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