Banco BPM to Review Credit Agricole Bid, Seeks ‘Adequate Value’

Banco BPM to Review Credit Agricole Bid

Banco BPM SpA has decided to examine a proposal from Credit Agricole SA to merge their Italian banking operations. The board has authorised Chief Executive Officer Giuseppe Castagna to begin discussions. In its statement, the board said it would pursue “adequate value” for shareholders and noted that valuation criteria must account for the loss of contestability — meaning the bank would no longer be open to competing offers — and must secure maximum shareholder approval.

Credit Agricole already holds close to 30% of Banco BPM. Its proposal, made earlier this week, would create Italy’s third-largest bank. The French lender has said it would hold less than half of the combined entity, which would stay listed in Milan, with Castagna continuing to lead it. Credit Agricole has offered a 20% premium for Banco BPM and a €1 billion dividend for shareholders, and estimates annual benefits of about €800 million from the combination.

Why the Deal Matters

The transaction touches on sensitive questions of national interest. Credit Agricole has reportedly sought to reassure the Italian government, a key stakeholder that has blocked banking deals in the past, by indicating that savings collected in Italy would stay invested in domestic assets and that it is willing to adjust its proposal. Banco BPM, valued at roughly €22 billion, bought Italian asset manager Anima Holding SpA last year. That unit may prove politically delicate, given Rome’s interest in keeping national savings and investments in Italian hands. A Banco BPM spokesperson said the bank has no intention of selling Anima, after reports that Credit Agricole is open to a divestment following the deal.

For businesses and advisers tracking European financial-sector consolidation, the proposal signals further cross-border activity in Italian banking. The structure — a foreign majority owner keeping the target listed and locally managed — may shape how regulators and governments as…