Crédit Agricole has proposed discussions with Banco BPM over a merger between Banco BPM and Crédit Agricole Italia.
The proposed combined bank would remain listed in Milan, with the French lender adding that Banco BPM will be “at the heart” of the new entity.
Crédit Agricole submitted what it described as a “friendly” proposal to Banco BPM’s board of directors.
The proposal follows the existing long-term partnership between the two groups.
The merger would create Italy’s third-largest banking group, according to Crédit Agricole.
The combined business would have 6.5 million customers and more than 2,300 branches.
The group would combine Banco BPM and Crédit Agricole’s Italian operations.
Its activities would cover banking, insurance, asset management, and specialised financial businesses.
Crédit Agricole’s Italian insurance activities would form part of the combined business, including life insurance and property and casualty.
The proposal sets out that the combined group would retain its own identity and operational autonomy. Its Board of Directors would have a majority of independent members.
Banco BPM’s current CEO would lead the new entity.
For Banco BPM shareholders, Crédit Agricole has proposed an exchange ratio carrying a 20% premium. Current Banco BPM shareholders would also receive an exceptional dividend of €1bn ($1.1bn).
The banks estimate annual synergies at €800m.
Crédit Agricole said the transaction would accretive Banco BPM’s earnings per share in 2027 by around 24%, based on the proposed premium and expected synergies.
Crédit Agricole currently holds 29.6% of Banco BPM. It would own around 45% of the combined entity following its contribution to the transaction.
The deal would require approval from Banco BPM’s general meeting under conditions allowing the “whitewash” procedure, equivalent to an exemption from the requirement to make a public offer.
It would also need standard approvals for the transaction, including ECB authorisation and application of the Italian “golden power” regime.
Crédit Agricole said the proposed transaction could close in the second half of 2027.
