Banco BPM's board voted unanimously on 7 June to write to Banca Monte dei Paschi di Siena proposing talks on a combination that would create Italy's second-largest bank by loans and deposits.
Why Banco BPM S.p.A. is buying Banca Monte dei Paschi di Siena S.p.A.
Banco BPM said the two banks' complementary branch networks and product factories would create a national champion, the leading operator by branches in Lombardy, Tuscany and Veneto, and that the deal would fit alongside MPS's integration of Mediobanca. It also said the combination would widen strategic options for MPS's stake in Assicurazioni Generali.
Deal terms and financing
No financial terms were set out. Banco BPM projected over €1.1bn of run-rate pre-tax synergies, value creation of at least €5.5bn, EPS accretion above 10% and a pro-forma fully loaded CET1 ratio of about 15%, with governance balanced between the two banks and both brands preserved.
Regulatory approvals and timing
Intesa Sanpaolo launched a public exchange offer for MPS on 8 June. MPS said in July that Banco BPM's idea merited full review. On 31 July Banco BPM's board unanimously ended consultations, saying the conditions for a shared agreement had not been met; MPS said it took note and would keep evaluating its options.
Market context
Banco BPM held about 3.7% of MPS. Crédit Agricole, Banco BPM's largest shareholder with 29.3%, had said publicly that it was hard to see how a combination would create value.
