Banco BPM shares jumped about 10% in Milan on Monday after Crédit Agricole proposed merging its Italian business with the lender to create what it says would be Italy’s third-largest banking group.
The French bank, which owns 29.6% of Banco BPM, said it has submitted a friendly proposal to the Italian lender’s board to begin talks on combining Banco BPM with Crédit Agricole Italia. Crédit Agricole would hold about 45% of the combined company, which would stay listed in Milan and serve 6.5 million customers through more than 2,300 branches.
Under the proposal, the exchange ratio would reflect a 20% premium in valuing Banco BPM relative to the 2027 earnings multiple used for Crédit Agricole’s contributed businesses, and Banco BPM shareholders would receive a €1 billion extraordinary dividend. Crédit Agricole estimated pre-tax synergies at €800 million a year. Banco BPM’s current chief executive would lead the combined company.
The deal would need approval at a Banco BPM extraordinary meeting by at least two-thirds of the capital represented, without opposition from a majority of the shareholders present other than Crédit Agricole and other large holders, authorization from the European Central Bank and clearance under Italy’s golden power rules, and could be completed in the second half of 2027.
The proposal helped lift European banks. The Euro Stoxx banking index gained 1.6% by 09:26 GMT and the STOXX 600 rose 0.5% to 651.38, Reuters reported. UniCredit gained 5.2% after a 24% annual rise in third-quarter earnings and a higher full-year profit goal, while Crédit Agricole was down 1% at that point.
Investors will watch for the response from Banco BPM’s board and any signal from Rome on the golden power review.
