Italy’s Monte dei Paschi di Siena (MPS) and rival Banco BPM held talks about a long-mooted potential merger shortly after Luigi Lovaglio was reappointed as MPS CEO in April, Italian news agency Adnkronos reported on Thursday.
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A tie-up between the country’s third and fourth-largest lenders has been considered a possibility for many years, with successive governments in Rome keen to build a third sizeable player in Italian banking, alongside UniCredit and Intesa Sanpaolo.
- Fuelling expectations of a deal, Banco BPM invested in MPS in November 2024. The move triggered a takeover attempt from UniCredit which tried, as a countermove, to acquire BPM, but failed.
- The CEOs of BPM and MPS were both handed a new mandate in April.
- BPM CEO Giuseppe Castagna said after his reappointment that MPS remained a merger possibility for his bank, but the timing could be an issue.
- MPS last year bought Mediobanca and is working to complete the integration by the end of 2026. Lovaglio has repeatedly said MPS is focused on Mediobanca.
- Citing financial sources, Adnkronos reported that there had been merger contacts after last month’s annual general meeting at MPS.
- Reuters could not verify the report.
- Earlier on Thursday, Corriere della Sera daily also said contacts had accelerated, adding BPM may hire Goldman Sachs as an adviser in addition to Lazard and Citi.
- MPS’ second-largest investor, billionaire Francesco Gaetano Caltagirone, who wanted to replace Lovaglio as CEO, warned this month about the terms of a possible BPM-MPS merger, saying MPS risked being “absorbed” by BPM.
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France’s Credit Agricole is the main shareholder in BPM, which in turn owns 3.7% of MPS.
- BPM played an important role in swinging the balance in favour of Lovaglio at the April 15 shareholder vote to pick a new CEO, in a defeat for Caltagirone who voted against Lovaglio’s reinstatement.
