The world’s oldest bank has a choice to make.
The board of Italy’s Banca Monte dei Paschi di Siena is meeting Monday to consider an unsolicited €30.6 billion ($35.3 billion) acquisition offer from Intesa Sanpaolo, the nation’s largest bank.
That offer, seen by Banking Dive, counters a proposed merger of equals that fellow Italian lender Banco BPM sent Monte Paschi on Sunday. Financial terms were not included in BPM’s public statement on the deal, but the bank said the combination would create a lender with €50 billion in market capitalization. BPM holds a market value of around €20.3 billion, while Monte Paschi is worth roughly €27.3 billion.
Intesa’s offer, by contrast, is much more complex. Italy’s largest bank would offer Monte Paschi shareholders 1.6 of its own shares plus €1 in cash for each share they own. The offer values each Monte Paschi share at €10.09 – a 12.5% premium over the bank’s closing stock price from Friday. The cash component would equal roughly €3 billion.
To help assuage any antitrust concerns from the Italian government, Intesa also made a deal with insurer Unipol Assicurazioni, which would pay between €3 billion and €3.5 billion in cash to acquire the Monte Paschi brand, about 635 of the bank’s branches – or roughly half of its presence – and most of the central functions needed to operate the business as an independent bank.
Unipol is already the largest shareholder in another Italian bank, BPER Banca, and would propose a merger between that lender and the Monte Paschi assets it gets from Intesa, creating a lender that would operate under the name Banca Monte dei Paschi.
Intesa, meanwhile, would keep 625 Monte Paschi branches and retain Mediobanca, the Italian bank over which Monte Paschi gained control last September. Acquiring Mediobanca would give Intesa a 13% stake in another insurer, Generali, which counts 75 million customers and manages a healthy portion of Italy’s pension savings.
Intesa said in a separate statement that it’s temporarily buying a further 3% in Generali to improve its accounting benefits. However, Intesa CEO Carlo Messina, on a call Monday with analysts, ruled out an acquisition of Generali, according to Bloomberg.
In all, the Monte Paschi businesses that Intesa would keep account for about 80% of the 2025 net income that Mediobanca and Monte Paschi have projected, Intesa said.
Messina said he was confident of securing Monte Paschi investors’ support before the bid concludes in December.
Intesa estimated it will cost roughly €2.1 billion to integrate Monte Paschi before taxes. It also projected about €1.5 billion per year in pretax cost synergies, as well as revenue synergies of roughly €1.4 billion before tax.
A day earlier, BPM said its proposed combination with Monte Paschi would “create a new national champion.”
That’s likely a direct reference to Intesa and Italy’s other global systemically important bank, UniCredit. It also may reflect a call by the Italian government to grow BPM into “a third pillar” large enough to challenge its two bigger competitors.
UniCredit, for its part, proposed buying BPM in 2024 for €10.1 billion. That bid failed but was largely seen, at the time, as a secondary growth strategy. UniCredit that year had rapidly amassed a stake in Commerzbank, though the German lender, to this day, has consistently rebuffed takeover efforts.
UniCredit CEO Andrea Orcel has said he continues to pay attention to deal opportunities in Italy.
A proposed tie-up between BPM and Monte Paschi would generate more than €1.1 billion in pretax synergies, including over €650 million in cost savings and more than €450 million of revenue synergies, the potential acquirer said.
Intesa’s Messina called the BPM proposal a “love letter” in contrast to his concrete offer. Intesa’s competing bid, in fact, prevents Monte Paschi, under Italian law, from agreeing to BPM’s offer without gaining shareholder approval.
A tie-up with Intesa would create the Eurozone’s second-largest lender by market value, after Spain’s Santander. (The Eurozone excludes Britain and Switzerland, so HSBC and UBS aren’t being compared.)
Monte Paschi, meanwhile, has seen some tumult at the top. Despite securing the Mediobanca deal, CEO Luigi Lovaglio lost support from his bank’s board amid disagreements over strategy. He returned in April, though, with the backing of key shareholders at Monte Paschi’s annual meeting.
