Crédit Agricole ends the stalemate over BancoBpm: a merger in Italia is on the table, along with a one-billion special dividend for shareholders

A new chapter in the Italian banking saga. Crédit Agricole has taken the plunge and proposed a merger between its Italian subsidiary and BancoBpm. The French group has submitted a friendly proposal to the board of the bank led by Giuseppe Castagna to create Italia’s third-largest banking group, with 6.5 million customers and over 2,300 branches. BancoBpm would remain listed on the Milan Stock Exchange and form the core of the new entity.

The plan provides for “a 20 per cent premium on the valuation of BancoBpm for the purposes of the share exchange”, a premium calculated on the basis of the 2027 price-to-earnings ratio “to recognise Crédit Agricole’s contributions”, as stated in a press release, as well as a one-off dividend of one billion euros to be paid to the bank’s current shareholders.

The transaction would increase Crédit Agricole’s stake in the bank resulting from the merger from the current 29.6 per cent to around 45 per cent, significantly strengthening its position as a shareholder from the current level of around 29.6 per cent.

From a business perspective, the French estimate annual pre-tax synergies of 800 million euros and an increase of around 24 per cent in BancoBpm’s earnings per share in 2027, according to the assumptions set out in the proposal.

This marks a significant development in the consolidation of the Italian banking sector, which is currently at a decisive juncture following Intesa Sanpaolo’s public takeover bid for MPS. The French have long since strengthened their stake in the bank based in Piazza Meda – an institution that had been targeted by UniCredit, to the extent that it became the subject of a public takeover bid which subsequently fell through due to government opposition and the restrictions imposed under the Golden Power scheme. It now remains to be seen how BancoBpm will respond.