Credit Agricole Proposes Merger of Italian Business With Banco BPM — 2nd Update

By Dominic Chopping

French bank Credit Agricole said it approached Banco BPM about a potential merger with its Italian business, joining a dealmaking wave that is shaking up Italy's banking sector.

Credit Agricole said Monday that it proposed to fold its Italian banking and insurance operations into BPM and pay a 1 billion-euro ($1.11 billion) dividend to BPM shareholders in exchange for a roughly 45% stake of the combined group. The French bank is currently BPM's biggest shareholder with a 29.6% stake.

The plan would build Italy's third-largest banking group around BPM, which would remain listed in Milan, Credit Agricole said. The proposal, submitted to BPM's board for evaluation, aims to kick off merger discussions, it added.

BPM didn't respond to a request for comment.

Shares in BPM rose as much as 12% in early European trade, giving the Milan-based bank a market value of roughly 22.4 billion euros ($24.96 billion), according to FactSet. Meanwhile, Credit Agricole shares fell up to 1.8%.

The proposed tie-up comes after a recent flurry of merger efforts within the Italian banking industry as lenders step up attempts at consolidation in the highly fragmented market.

BPM has been a recurrent target of those attempts.

Banca Monte dei Paschi di Siena in August proposed a merger with BPM, but its shareholders rejected the plan. In June, BPM made its own proposal for a combination with Monte dei Paschi, but later walked away after Credit Agricole expressed doubts over the merits of the deal. Last year, UniCredit made a bid for BPM that was ultimately withdrawn after the Italian government stepped in and imposed conditions.

Elsewhere, Intesa Sanpaolo is set to launch a takeover offer for Monte Paschi--which last year bought Mediobanca--after receiving Italian regulatory clearance, while UniCredit is two years into an effort to take over Germany's Commerzbank.

Credit Agricole said its proposal is friendly and aimed at creating a broader financial group offering increased scale, services and resilience. The combined group would serve 6.5 million customers across more than 2,300 branches, broadening the businesses' growth prospects through a strong national presence and increased financial strength, it added.

"The combined entity would be an Italian fully integrated financial services group, with enhanced capabilities to invest, innovate, and serve individuals, professionals, agricultural operators, and enterprises," Credit Agricole said in a statement. "It would benefit from the contribution of Credit Agricole's Italian insurance businesses, both life and non-life."

Expected synergies are estimated at 800 million euros a year, while Banco BPM's earnings per share would increase by an estimated 24% in 2027, the French bank added.

Banco BPM's chief executive, Giuseppe Castagna, would remain as head of the combined group under Credit Agricole's proposal.

The transaction proposed to Banco BPM could be completed in the second half of 2027.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

November 09, 2026 06:31 ET (11:31 GMT)