Banco BPM SpA’s board agreed to open merger talks with its largest shareholder, Credit Agricole SA, but put the French bank on notice that the price will have to rise to win over the Italian lender’s other investors.
Meeting in Milan on Thursday, the board reviewed the Nov. 8 letter in which Credit Agricole proposed merging its Italian banking arm into Banco BPM, along with controlling stakes in the group’s Italian life and property insurers. Directors began a detailed review of the plan and gave Chief Executive Giuseppe Castagna a mandate to test whether the conditions for a deal exist. Italian press reports said the decision was unanimous. The bank’s related-parties committee also began its own review.
Paying for lost contestability
The board’s statement made one point plainly: the merger would leave Credit Agricole with effective control and largely end Banco BPM’s appeal as a takeover target, a status that has supported its share price as UniCredit and Monte dei Paschi circled in recent years. Any proposal brought to shareholders, the board said, must use valuation criteria that reflect that loss and the strength of Banco BPM’s own business, so it can win the broadest possible support.
That support matters because the deal relies on Italy’s whitewash procedure, which lets Credit Agricole lift its stake above the mandatory-bid threshold without a full tender offer only if minority shareholders approve.
What Paris has put on the table
Credit Agricole, which owns 29.6% of Banco BPM, has proposed an exchange ratio that gives Banco BPM a 20% premium based on expected 2027 price-to-earnings multiples, plus a EUR 1 billion special dividend paid to current Banco BPM holders before the merger. It estimates annual pretax synergies of about EUR 800 million and says earnings per share would rise about 24% in 2027. Its stake would climb to about 45% of a Milan-listed group with roughly 6.5 million customers and more than 2,300 branches, Italy’s third-largest bank, with Castagna as chief executive.
Banco BPM also rejected speculation that its asset manager Anima could be sold as part of the deal, saying it has no intention of selling it.
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