Is it the 3rd largest Italian bank? Credit Agricole proposes merger with BPM Bank

O french group Crédit Agricole today presented a “friendly proposal” of merger between the subsidiary Crédit Agricole Italia and the Italian bank Banco BPM, aiming to create the third largest banking group in Italy.

According to the information disclosed by the French bank, the resulting entity would have a portfolio of 6.5 million customers and a network of more than 2,300 agencies in Italy, maintaining the seat of the BPM Bank and listing on the Milan Stock Exchange.

The new bank would be run by the current CEO (CEO) of the BPM Bank and would have a Board of Directors with a majority of independent members.

With this operation, Crédit Agricole would increase its current stake in BPM Bank from 29.6% to about 45% of the resulting entity's capital while integrating Italian insurance businesses.

“ This friendly proposal, which was submitted to the evaluation of the Bank’s Board of Directors BPM, is a natural extension of the long-term partnership between Banco BPM and Crédit Agricole and the mutual understanding developed between both groups,” the French entity stressed.

In the financial plan, the proposal provides for an exchange relationship incorporating a 20% premium on the valuation of the BPM Bank, as well as the distribution of an extraordinary cash dividend worth EUR 1,000 million among the current shareholders.

Crédit Agricole estimates that integration will generate annual synergies of around EUR 800 million before taxes, which would increase BPM Bank’s share profit by around 24% by 2027.

In order to achieve this, the operation will require the approval of the extraordinary general meeting of BPM Bank shareholders, through a mechanism known as “whitewash”.

This procedure would allow the French group to exceed the threshold of 30% of the capital without being obliged to launch a public takeover bid (PAO) on the rest of the shares, provided that minority shareholders approve the exemption under the rules.

In addition, the operation will be subject to the respective authorisations of the regulatory authorities, including that of the European Central Bank (ECB).

If the procedures are complied with, the operation can be completed in the second half of 2027, according to Crédit Agricole.

The French banking entity has more than half a century presence in Italy, where the subsidiary has 12,400 employees, 1,000 agencies and 2.9 million customers.