With M&A ramping up in Europe, Italy is leading the way with a dynamic financial sector, boasting seven active deals.
UniCredit’s hostile offer for Banco BPM is the most talked about, valued at $16.35 billion, almost $1 billion below BPM’s market value. The bid followed Unicredit’s unsuccessful negotiations with the Italian government to take over Banca Monte dei Paschi di Siena three years ago. Unicredit launched the new tender on BPM despite restrictions imposed by the government. The situation is currently stalling after Italy’s market regulator temporarily suspended the offer period.
For its part, Banco BPM recently acquired asset manager Anima for over $2 billion.
“When the wave of consolidation rises, there is almost always a domino effect, with the banks trying to defend their competitive position. In Italy, it was triggered by Intesa’s merger with UBI in 2020, which widened the market share gap with smaller players. In particular, it put pressure on UniCredit—the second largest domestic bank—to strengthen their competitive position,” says Paola Biraschi, managing director, European Banks Credit Research, at CreditSights, a FitchSolutions company.
In a highly competitive context, many other Italian banks have recently made headlines.
Earlier this year, Monte dei Paschi, Italy’s oldest bank, took the country by surprise when it proposed a $14 billion all-share merger offer for private investment bank Mediobanca.
Meanwhile, Mediobanca announced a voluntary public exchange offer for 100% of Banca Generali, a deal worth $7.1 billion, to create an Italian leader in wealth management.
In January, Banca Generali completed its all-cash buyout acquisition of broker Intermonte for $112 million.
Another important deal is BPER Banca’s $5 billion, all-share exchange offer for its competitor Banca Popolare di Sondrio. The European Central Bank recently cleared the bid.
Finally, a few weeks ago, Banca IFIS launched a $340 million cash-and-share offer for Illimity, the high-tech bank founded by former Intesa CEO Corrado Passera.
With so many deals in full swing, the consolidation process in Italy is considered good news and ultimately “positive for both banking customers and investors, as efficiency, profitability, and quality of service are all set to improve,” concludes Biraschi.
