Monte dei Paschi faces Intesa with a €34 billion offer to acquire two Italian entities
The world's oldest bank aims to become a new giant and protects itself against the takeover bid it faces from Intesa itself
BarcelonaMonte dei Paschi de Siena (MPS), the world's oldest bank, has reappeared with full force in the struggle within the Italian banking sector. After receiving the go-ahead from its board of directors, the Tuscan entity presented a 34 billion euro offer this Friday to buy the Italian banks BPM and Banca Generali.
The objective of this offer is twofold: on the one hand, Monte dei Paschi aims to become a new giant in the transalpine financial environment. If the operation were successful, the resulting bank would have a market capitalization of around 70 billion euros and about 450 billion euros in assets, approaching the two main entities in the country, which are Intesa Sanpaolo and Unicredit.
The other major objective behind this move is to confront Intesa Sanpaolo itself, which last June presented an offer of 30.6 billion euros to acquire Monte dei Paschi. In the eyes of the CEO of the Siena-based bank, Luigi Lovaglio, the purchase proposal for BPM and Banca Generali is the option that will bring the most value to shareholders and, at the same time, will prevent the disappearance of the Monte dei Paschi brand, a true insignia within the Italian banking sector.
So much so that this very week the Italian Prime Minister, Giorgia Meloni, took a stance on the matter. "I hope Monte dei Paschi does not break up, losing its name and identity," stated the leader, referring to the takeover bid presented by Intesa.
Precedents of the operation
Intesa Sanpaolo's offer for Monte dei Paschi is, at the same time, a response to a previous move by the Tuscan bank. Before the takeover bid launched in June, it emerged that Monte dei Paschi had initiated talks with BPM – one of the banks for which MPS has today made an offer – for a possible merger. The operation aimed to consolidate a third banking giant in Italy that would compete with Unicredit and, above all, Intesa in the domestic market.
Upon learning the news, Intesa rushed to present its hostile offer for Monte dei Paschi to curb its aspirations and the arrival of a new potential competitor.
Despite the offensive launched this Friday, Monte dei Paschi will have to convince the banks on which it has expressed interest, a task that will not be easy at all. At this point, it is worth considering the role of the French bank Crédit Agricole, which owns almost 30% of BPM and is the majority shareholder of Banca Generali. Already during the merger talks between Monte dei Paschi and BPM, Crédit Agricole expressed its doubts about the operation, stating that it did not see the synergies clearly and preferred to explore other options through its subsidiary in the transalpine country, Crédit Agricole Italia.
