Italy’s Intesa Makes €30b Bid To Buy Rival Bank MPS

Intesa’s move came after another Italian bank, Banco BPM, said it was considering a merger with MPS.

Intesa Sanpaolo, Italy’s largest bank, has offered to buy smaller rival Monte dei Paschi di Siena (MPS) in a €30.6 billion ($35 billion) unsolicited cash-and-share bid. This merger would give the eurozone its second-largest lender.

The finalisation of this M&A would place Intesa behind Spain’s Santander in terms of market value, overtaking France’s BNP Paribas and Italian peer UniCredit, which in turn is looking to expand its German business by acquiring Commerzbank.

Intesa’s move came after another Italian bank, Banco BPM, said it was considering a merger with MPS. Intesa’s proposal for a newly merged entity will push its market capitalisation to €126 billion and a net income goal of €16 ​billion in 2029. CEO Carlo Messina explained that although the offer was not previously accepted, it was friendly towards the MPS investors and he remains optimistic of securing their support by the end of the year, when the bid is due to conclude.

Messina has a cordial relationship with MPS’ two principal investors, the Delfin holding and businessman Francesco Gaetano Caltagirone, and the cash offer was made consciously to win them over to his side.

The Italian moneylender’s CEO is also confident that Intesa will reach the minimum targeted threshold of 66.67%. The offer entails a premium of 12.5% versus MPS’ closing share price on June 5, giving it a €27.4 billion market value. The market reacted positively to the news, with MPS jumping more ​than 10% on Monday, while Intesa lost 4%.

As part of the offer, Intesa teamed up with insurer Unipol, BPER Banca’s main investor, to sell a banking business comprising 635 of the MPS branches, half of its retail network, and the MPS brand itself if the merger proposal was accepted. These concessions were offered to address competition issues arising for Intesa from the acquisition and were also beneficial for MPS to maintain its position as the world’s oldest bank and as a force in retail banking.

Despite being smaller than the Messina-led bank, MPS casts a long shadow in Italy’s financial history. The financial institution was bailed out by the Italian government in 2017 and reprivatised in 2023-2024. MPS has since become a focal point for further banking consolidation in the Italian financial landscape after buying the Mediobanca merchant bank, becoming the largest investor in Generali, which is Italy’s largest ​insurer. Needless to say, it is these assets which are primarily driving Intesa’s attraction for the M&A deal.

Intesa’s offer sidelines Banco BPM, which has hoped to merge with MPS for a long time. Banco, Italy’s fourth-largest bank, has maintained that, even after Intesa’s interest, it is still open to a merger with the retail bank. Italy’s acquisition regulations forbid MPS from agreeing the terms of a deal with BPM without shareholder approval now that Messina has made a formal takeover bid.

Intesa refused to participate in the wave of mergers and acquisitions that started in November 2024 in the Italian banking industry, citing antitrust regulations. Messina has referred to this period as ‘the Wild West.’ To allay worries about competition, Intesa announced that it has reached an agreement with insurer Unipol to sell a banking business that comprises 635 MPS branches and MPS central offices in Siena, should its application be accepted.

Unipol is an ally of Intesa and the primary investor of the smaller bank BPER Banca. It had contributed similarly to the UBI agreement by purchasing branches to aid BPER’s growth and assisting Intesa in getting antitrust approval. Unipol has agreed to pay €3.5 billion for the deal and combine it with BPER to create a bank ​which would be called Banca Monte dei Paschi.

The next few weeks have much potential to redraw Italy’s financial map. With much at stake for the country’s banks, it remains to be seen who will emerge as winners and who will lose.