Crédit Agricole Proposes Merger Between Banco BPM and Its Italian Operations

Crédit Agricole S.A. has submitted a friendly merger proposal to Banco BPM S.p.A. to combine Banco BPM with Crédit Agricole Italia. The potential transaction would establish a fully integrated Italian financial services provider, acting as the third-largest banking group in the country with a network of more than 2,300 branches serving approximately 6.5 million clients.

According to the proposal, Banco BPM would serve as the core of the resulting company, which would maintain its stock market listing in Milan. The initiative is designed to preserve the operational autonomy and identity of the combined entity while implementing a balanced corporate governance structure. The board of directors would maintain a majority of independent members, and Giuseppe Castagna, the current chief executive officer of Banco BPM, would continue to lead the new organization as CEO.

The financial terms of the offer include an exchange ratio that reflects a 20 percent premium for Banco BPM shareholders, alongside a special dividend payout of one billion euros. Crédit Agricole estimates that the transaction would generate annual pre-tax synergies of 800 million euros and lead to an estimated 24 percent increase in Banco BPM's earnings per share by 2027.

As a result of the integration, Crédit Agricole would increase its equity stake from its current 29.6 percent to approximately 45 percent of the newly combined company. The project remains subject to several conditions, including approval by the extraordinary shareholders' meeting of Banco BPM and the receipt of regulatory clearances from the European Central Bank and under Italy's golden power regulations.

UniCredit chief executive officer Andrea Orcel addressed the development during a financial results presentation, noting that his bank views the French proposal as an opportunity to accelerate its own organic growth. UniCredit previously pursued an interest in Banco BPM before shifting focus entirely to its organic plans in Italy and its ongoing efforts regarding Commerzbank in Germany.

The proposed merger builds on a long-term partnership between the two banking groups, emphasizing a shared long-term industrial vision. Proponents argue the combination will enhance support for the real economy, particularly small and medium-sized enterprises, while providing expanded career and development opportunities for employees across both networks.

If finalized, the transaction is expected to be completed in the second half of 2027, subject to the necessary corporate approvals and regulatory authorizations.