Banco BPM and MPS in $58 Billion Italian Banking Merger Talks
CNBC reported Sunday that Banco BPM has formally invited Banca Monte dei Paschi di Siena to enter merger discussions. The prospective tie-up would forge a combined entity valued at roughly 50 billion euros, or approximately $58 billion, on the Milan bourse.
A Merger That Would Leapfrog UniCredit
The proposed combination would install the new group as Italy’s second-largest bank by market value. That ranking would place it directly ahead of rival UniCredit, which has actively sought to prevent this outcome. Banco BPM’s board, which includes representatives from France’s Credit Agricole as its largest shareholder, voted unanimously to express interest in a so-called “merger of equals.” Under that structure, both institutions would carry equal weight within the combined group. Banco BPM projected earnings per share gains exceeding 10%, underpinned by annualised pre-tax synergies of more than 1.1 billion euros. MPS had not publicly responded to the proposal as of Sunday afternoon.
Background: Years of Dealmaking Drama
The long-discussed pairing has deep roots in recent Italian banking history. Banco BPM first acquired a stake in MPS in November 2024, when the Italian government completed the reprivatisation of the state-rescued Tuscan lender and invited domestic investors to anchor the shareholder register. That development almost immediately triggered a counter-move from UniCredit, which launched a full takeover bid for Banco BPM in a bid to disrupt any BPM-MPS alliance. UniCredit’s offer ultimately collapsed in July 2025, but it effectively froze Banco BPM’s ability to pursue strategic alternatives for nearly a year. MPS has a board meeting scheduled for Monday. That session would represent its first formal opportunity to consider the approach.
Also Read: Credit Agricole Raises Banco BPM Stake Amid Italian Banking Battle
Second Wave of Italian Banking Consolidation
Sunday’s announcement arrives as analysts watch for a fresh round of M&A activity across Italy’s banking sector. A burst of deal activity last year reconfigured several lenders, and the BPM-MPS proposal could signal that consolidation pressure has not yet peaked. European banking regulators and the Italian government have both encouraged domestic champions to scale up in recent years. A combined BPM-MPS group would hold significant retail and corporate lending footprints across northern and central Italy. The deal’s ultimate shape remains uncertain. Banco BPM has not disclosed financing terms or a formal exchange ratio. Execution risk remains real, given UniCredit’s historical opposition and the complexity of merging two large listed institutions. Markets will watch MPS’s board response on Monday for the first indication of whether talks advance.
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