The collapse of the proposed tie-up leaves Banca Monte dei Paschi di Siena weighing Intesa Sanpaolo’s unsolicited bid and a possible move on Banco BPM, with Crédit Agricole and Rome still central to the outcome.
Banco BPM has ended merger discussions with Banca Monte dei Paschi di Siena, closing off a deal that had been pitched on June 7 as a merger of equals and opening a new phase in Italy’s banking consolidation. The talks unraveled after what Banco BPM described as a lack of definitive progress and opposition from its largest shareholder, Crédit Agricole, which was seen as unwilling to accept a transaction that would dilute its influence. The breakdown now leaves MPS considering a more aggressive role, including a potential takeover of Banco BPM after initially being part of a friendly combination. The proposed merger would have created Italy’s second-largest lender, with a combined market capitalization of roughly €50 billion. MPS entered the talks with a valuation of around €27.3 billion, while Banco BPM was worth about €20.3 billion. The situation shifted almost immediately when Intesa Sanpaolo made an unsolicited €30.6 billion ($35.3 billion) bid for MPS on June 8, complicating the strategic picture and raising the stakes for all sides. The episode is significant because MPS has spent years trying to recover from heavy losses and state-backed rescues. Founded in 1472, the bank had become one of Europe’s most prominent restructuring stories, with the Italian government taking a major shareholding during its bailout. Rome has since reduced that exposure, cutting its stake to 11.7% after selling 15% for €1.1 billion over the preceding years. A merger with Banco BPM could have helped create a stronger domestic competitor to Intesa Sanpaolo and UniCredit while giving the state a clearer path out of MPS. Instead, investors now face a more complex contest. MPS shareholders must weigh Intesa’s premium offer against other strategic options, while Banco BPM investors may now have to consider the risk of a hostile or semi-hostile approach. Crédit Agricole’s position as Banco BPM’s largest shareholder adds another obstacle, and Rome’s preference for domestic banking consolidation could shape how regulators assess rival bids.