Italy’s Banco BPM Seeks Merger Talks With Monte dei Paschi as Rival Banks Weigh Options

According to Reuters, Banco BPM’s proposal comes as several major Italian lenders assess their strategic options around MPS, which has become a key target following its return to private ownership and a series of transformative deals.

MPS, the Tuscan bank rescued by the Italian state in 2017 and fully reprivatised between 2023 and 2024, has emerged as a central figure in Italy’s banking consolidation efforts. Its acquisition of Mediobanca during a previous wave of mergers strengthened its position in the sector and made it the largest shareholder in insurer Generali.

“All roads lead to Siena,” MPS Chief Executive Luigi Lovaglio told a recent event, referring to the bank’s home city and its growing importance in the country’s banking landscape.

As Banco BPM formally signaled its intention to pursue talks, four people familiar with the matter said that both Intesa Sanpaolo and BPER Banca were also evaluating possible approaches to MPS, according to Reuters. One source said Intesa’s board met on Sunday to discuss the situation. Intesa declined to comment, while BPER could not immediately be reached.

Sources indicated that Intesa’s interest may be limited to selected parts of MPS rather than a full acquisition. According to Reuters, such an approach could imply a potential break-up of the bank. Intesa’s options may also be constrained by antitrust considerations following its 2020 acquisition of UBI Banca, a deal that cemented its position among Italy’s largest lenders.

Banco BPM said it is working with advisers Citi and Goldman Sachs on its proposal and argued that a combination with MPS would protect the interests of both institutions. The bank estimated that a merged entity would carry a market value of roughly 50 billion euros ($58 billion).

The lender also projected that the transaction could boost earnings per share by more than 10%, supported by annual pre-tax synergies exceeding 1.1 billion euros, according to Reuters.

Banco BPM said its board unanimously approved the decision to approach MPS regarding discussions over what it described as a “merger of equals.” The board includes representatives of Credit Agricole, the French banking group that is Banco BPM’s largest shareholder.

The bank did not provide additional details about how such a transaction would be structured.

MPS declined to comment immediately on Banco BPM’s announcement, saying it would wait until its board had reviewed the proposal. The bank is scheduled to hold a board meeting on Monday, which will provide its first opportunity to formally discuss the matter, according to Reuters and a person familiar with the situation.

Banco BPM became a shareholder in MPS in November 2024 when the Italian government completed the lender’s reprivatisation process and introduced a group of domestic investors as cornerstone shareholders.

The prospect of a merger between Banco BPM and MPS had surfaced previously. Per Reuters, speculation surrounding such a combination helped prompt UniCredit to launch a takeover bid for Banco BPM in late 2024. Although that offer ultimately failed in July 2025, it effectively prevented Banco BPM from pursuing alternative merger opportunities during the intervening period.

Source: Reuters