A bidding war has erupted for Banca Monte dei Paschi di Siena, the world's oldest bank, with Intesa Sanpaolo making an unsolicited offer of $35.3 billion (30.6 billion euros). This move came just a day after Banco BPM proposed a "merger of equals" with Monte dei Paschi. Intesa's bid values Monte dei Paschi at 12.5% above its closing share price from the previous Friday, specifically offering 1.6 of its own shares plus 1 euro in cash for each Monte dei Paschi share, with the cash component totaling approximately 3 billion euros. Intesa aims to create one of Europe's most valuable banks and boost its position as Italy's largest lender, also gaining control over Monte dei Paschi's significant stake in Assicurazioni Generali SpA.
To address potential antitrust concerns, Intesa has a separate agreement with Unipol Assicurazioni, where Unipol would acquire the Monte dei Paschi brand, about 635 of its branches (roughly half its presence), and central operational functions for 3 billion to 3.5 billion euros. Unipol, a major shareholder in BPER Banca, would then merge these acquired Monte dei Paschi assets with BPER Banca, forming a new entity under the Monte dei Paschi brand. Intesa, meanwhile, would retain 625 Monte dei Paschi branches and its holding in Mediobanca, which Monte dei Paschi acquired last year, thereby gaining a 13% stake in Generali.
Intesa estimates an integration cost of approximately 2.1 billion euros before taxes, with projected annual pre-tax cost synergies of 1.5 billion euros and revenue synergies of about 1.4 billion euros. Carlo Messina, Intesa's CEO, expressed confidence in securing investor support. In contrast, Banco BPM's "merger of equals" proposal, which would create a banking group with a market value exceeding 50 billion euros, aims to establish a "new national champion" and a "third pillar" in Italian banking. Banco BPM projects over 1.1 billion euros in pre-tax synergies from its proposed tie-up, including more than 650 million euros in cost savings and over 450 million euros in revenue synergies. Intesa's competing bid legally prevents Monte dei Paschi from accepting BPM's offer without shareholder approval.
The scramble for Monte dei Paschi follows its reprivatization in 2023 after a state bailout in 2017. The bank's acquisition of Mediobanca last year made it the largest investor in Generali, an insurance firm that has been central to recent M&A activity. The outcome of this bidding war could significantly reshape the Italian financial landscape, potentially creating the Eurozone's second-largest lender by market value after Spain's Santander, if Intesa's bid is successful.
