In a bold move that could redefine Italy’s banking landscape, Banca Monte dei Paschi di Siena (Monte Paschi) has launched an unexpected €13.3 billion bid to acquire its larger rival, Mediobanca SpA. The proposal, however, has been met with scepticism and resistance, as Mediobanca is likely to reject the offer, sources familiar with the matter suggest.
Mediobanca’s shares rose by as much as 6.9% in Milan trading following the announcement, while Monte Paschi experienced a sharp decline, dropping as much as 10%. Analysts have questioned the synergy between the two banks, citing limited integration potential and hurdles to the deal’s success.
The acquisition attempt comes amidst a wave of banking consolidation in Italy. Recent months have seen Banco BPM SpA’s attempted acquisition of Anima Holding SpA and UniCredit SpA’s subsequent bid for Banco BPM. Monte Paschi’s approach signifies a shift from being perceived as a takeover target to positioning itself as a consolidator.
If successful, the merger would create a banking entity ranking among Italy’s top three financial institutions by total assets. Monte Paschi has highlighted €300 million in potential annual cost savings from the transaction, with plans to leverage €2.9 billion in deferred tax assets for capital benefits. However, critics note that the proposed €600 million in integration charges may be overly optimistic.
The bid also places the spotlight on the influential roles of two billionaire shareholder families, the Del Vecchios and Francesco Gaetano Caltagirone, who hold significant stakes in both banks. Meanwhile, the Italian government remains a critical player, retaining an 11.7% stake in Monte Paschi and using its privatisation as a means to create a counterweight to the country’s banking giants, UniCredit and Intesa Sanpaolo.
Monte Paschi’s move underscores its shift from recovery to expansion. Once teetering on collapse and rescued by a state intervention in 2017, the bank has seen its shares more than double in the past year. Mediobanca, valued at approximately €12.7 billion, has also seen strong performance, with its shares climbing 28% over the same period.
While Monte Paschi’s offer marks a transformative ambition, doubts about its feasibility and synergies between the two institutions cast uncertainty over the bid’s outcome. As Italy’s banking sector continues to consolidate, this proposed deal highlights the evolving dynamics within the nation’s financial landscape.
