Crédit Agricole proposes merging its Italian arm with Banco BPM to form Italy's third-largest bank
The French lender offered Banco BPM shareholders a 20% premium and a €1 billion special dividend in a "friendly" proposal that would lift its stake in the combined Milan-listed bank to about 45%. Banco BPM shares jumped more than 9%.
France’s Crédit Agricole said on Monday, 9 November, that it has proposed talks on merging its Italian subsidiary, Crédit Agricole Italia, with Banco BPM. The bank called the offer a “friendly proposal”, submitted to Banco BPM’s board for evaluation.
Key terms
- The combined group would be built around Banco BPM and stay listed in Milan; Banco BPM CEO Giuseppe Castagna would lead it.
- It would serve 6.5 million customers through more than 2,300 branches, making it Italy’s third-largest banking group, according to Crédit Agricole.
- Banco BPM shareholders would get an exchange ratio reflecting a 20% premium plus a €1 billion extraordinary dividend.
- Crédit Agricole estimates synergies of €800 million a year and would raise its holding from 29.6% to about 45%.
The deal would require approval by Banco BPM’s extraordinary shareholder meeting under a so-called “whitewash” procedure, which would exempt Crédit Agricole from a mandatory takeover bid, as well as regulatory clearances.
Market reaction
Banco BPM shares rose more than 9% in early trading, ANSA reported, and the news helped lift European bank stocks, according to Reuters. Italian financial daily Il Sole 24 Ore noted that brokers see the government’s “golden power” screening rights as a possible wild card.
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