Italian saga may have French kingmaker, or pooper

Intesa Sanpaolo

15/09/2026 11:41

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Neil Unmack
LONDON, Sept 15 (Reuters Breakingviews) - The outcome of Italy’s bank M&A saga may be determined more in Paris than Milan. Crédit Agricole CAGR.PA, a roughly €60 billion listed lender controlled by Gallic regional cooperatives, has emerged as a kingmaker in the takeover battle for €35 billion Banca Monte dei Paschi di Siena BMPS.MI (MPS). The French bank holds a near-30% stake in €24 billion Banco BPM, which MPS is trying to buy to fend off an offer from Italian giant Intesa Sanpaolo ISP.MI. CrédAg CEO Olivier Gavalda could drive a hard bargain, or try some dealmaking of his own.
MPS boss Luigi Lovaglio wants to create a third major force in Italian banking, by combining with both long-mooted partner BPM and wealth group Banca Generali BGN.MI. This two-fold M&A assault would help secure MPS' independence in the face of Intesa's takeover attempt. The big question is what CrédAg, as the largest BPM shareholder, thinks.
One option would be for Gavalda to play ball. MPS' Lovaglio expects his three-way M&A deal to generate some €1.2 billion of annual cost savings and generate a bank with a juicy 19%-plus return on tangible equity. CrédAg might want a piece of that. It would hold 11% of the enlarged bank.
Still, that's not a controlling stake, and the MPS offer for BPM has a scant premium and comes with execution risks. Lovaglio will need to combine MPS with Banca Generali and BPM, while also completing the integration of Mediobanca MDBI.MI. La Stampa reported on Tuesday that CrédAg sees MPS' offer as unattractive. The French bank could potentially demand a higher price, or negotiate a side deal alongside the merger that would boost its own Italian operations. This might involve buying some branches from the enlarged MPS or getting greater control of the Agos consumer finance joint venture it holds with BPM.
Another option would be for Gavalda to sink the MPS offer and focus instead of merging CrédAg's local business with BPM. The French group's Italian operations are worth perhaps €10 billion, if valued on a multiple of 12 times trailing earnings. And Deutsche Bank pegs the likely annual savings at some €870 million.
Even that deal, however, isn’t simple. For one, a straight share swap could see CrédAg own almost half of BPM. That level of control might ruffle feathers in Italy, especially as the government previously blocked a takeover by UniCredit CRDI.MI. It might be possible to mitigate this by getting BPM to pay CrédAg some cash as part of a merger, potentially funded by the sale of a stake in its €2 billion fund group Anima, or else pay with part of its share in the Agos venture. This would reduce the French stake in the combined entity. Though it's not clear why BPM's other shareholders would want to go down this path. Getting them on board might require CrédAg to accept a lower price for its Italian unit. 
The upshot is that all of the potential transactions on the table for CrédAg are complex. Still, Italy's banking sector will consolidate with or without the French group. For Gavalda, then, doing nothing is probably not an option.
     
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CONTEXT NEWS
Banca Monte dei Paschi di Siena (MPS) on August 21 announced a tender offer for Banco BPM. MPS offered 1.567 of its own shares for each BPM share, valuing the rival bank at 16.3 euros, after factoring in a special dividend. Crédit Agricole owns 29.3% of Banco BPM stock.

(Editing by Liam Proud; Production by Streisand Neto)
((For previous columns by the author, Reuters customers can click on UNMACK/neil.unmack@thomsonreuters.com))