The latest twist in Italy’s banking takeover saga has pitted market leader Intesa Sanpaolo against the biggest winner of the shakeup so far, Monte dei Paschi di Siena (MPS).
With a less concentrated banking sector than France or Spain, Italy has seen a wave of bids and counterbids since late 2024 as lenders jockey for position amid a revival in dealmaking fuelled by stronger balance sheets and excess capital.
The deal frenzy has baffled even seasoned observers, with MPS now pursuing a two-pronged defence strategy to try to fend off Intesa’s takeover approach. Intesa on Thursday secured shareholder approval for the share financing of its plan.
Here’s where things stand, and what might happen next.
WHAT’S THE LATEST?
The first merger wave has reshaped Italy’s second-tier banking sector, which sits below industry giants Intesa and UniCredit.
A long-running political ambition to create a third major group has helped transform MPS, which was rescued by Rome in 2017 and reprivatised in 2023-2024, into an unlikely acquirer.
Last year, MPS bought bigger rival Mediobanca and, through that deal, became the leading shareholder in Generali, Italy’s biggest insurer, which both Intesa and UniCredit covet.
After UniCredit built a 9% stake in Generali last year, Intesa launched its €35 billion ($41 billion) cash-and-shares bid for MPS in June. The deal would give Intesa roughly 13% of Generali, control of Mediobanca and half of MPS’s branch network.
Critical of Intesa’s plan to break up its retail network, MPS initially explored a merger proposed by mid-sized peer Banco BPM hours before Intesa unveiled its offer.
When talks with BPM broke down last month, MPS responded with all-share bids for both BPM and wealth manager Banca Generali.
MPS’s Generali stake is now key to its defence strategy.
The bank plans to use part of that holding to reward shareholders, who would receive €3 billion in cash as part of the mainly share-based offer from Intesa.
Generali CEO Philippe Donnet has also emerged as an important ally for MPS boss Luigi Lovaglio, with the insurer now open to exploring commercial deals with the Tuscan bank.
Generali, which competes with Intesa in life insurance, owns 50.2% of Banca Generali and could choose to tender its stake.
WHAT HAPPENS NEXT?
MPS shareholders are due to vote on the defence plan on October 29.
Thursday’s approval of Intesa’s financing plans was widely expected. The real uncertainty now centres on the October vote.
Investors remain cautious about MPS’ €37 billion twin bids for BPM and Banca Generali, with shares in both targets trading below the offer values.
Still, several people close to Intesa said the scheme had significantly complicated its takeover plans by creating uncertainty and confusing investors.
WHAT’S THE COMPLICATION?
Intesa is awaiting European Central Bank and antitrust approvals for its bid, with the tender offer expected to begin only after MPS shareholders vote on its defence plan.
MPS investors could approve its twin bids and still choose to tender their shares into Intesa’s offer.
Intesa is counting on completing its offer by the end of December, before MPS has a chance to launch its own bids.
COULD UNICREDIT MAKE A MOVE?
UniCredit’s 9% Generali stake has given it sway in the Intesa-MPS battle.
Now that its two-year pursuit of Commerzbank has left it with de facto control of the German lender, UniCredit could refocus on Italy, where it has so far failed to make a mark in the consolidation wave, bankers said.
UniCredit CEO Andrea Orcel has said he may forego domestic acquisitions rather than overpay.
Bankers don’t expect Orcel to disrupt Intesa’s plans directly, and instead view Banco BPM and Banca Generali as potential targets for UniCredit.
WHAT’S THE GOVERNMENT’S STANCE?
The government has maintained a neutral position in the latest banking tussle and is not expected to participate in the October vote with its remaining 4.9% stake in MPS.
($1 = 0.8603 euros)
(Additional reporting by Elvira Pollina and Giulio Piovaccari )
