Crédit Agricole Wants to Fold Its Italian Arm Into Banco BPM and Take 45% Without Launching a Takeover Bid

Crédit Agricole already owns 29.6% of Banco BPM. On Monday it asked for much more. The French group proposed merging its Italian subsidiary, Crédit Agricole Italia, into Banco BPM, a deal that would create Italy's third-largest banking group with 6.5 million customers and more than 2,300 branches.

The offer is pitched as friendly. The combined bank would be built around Banco BPM, stay listed in Milan, keep a board with a majority of independent directors and keep Giuseppe Castagna as chief executive. Banco BPM's board has confirmed it received the proposal and is reviewing it.

What shareholders get

Banco BPM investors would receive shares at an exchange ratio that Crédit Agricole says carries a 20% premium, plus a €1 billion extraordinary dividend. The French bank expects €800 million a year in synergies and estimates the deal would lift Banco BPM's 2027 earnings per share by about 24%. Crédit Agricole would also bring in its Italian life and non-life insurance businesses.

In exchange, Crédit Agricole's holding would rise from 29.6% today to roughly 45% of the merged bank. A jump that size would normally oblige it to bid for the whole company.

The no-bid route

The structure is built to avoid that bid. Banco BPM's shareholder meeting would have to approve the merger by a two-thirds majority of the capital present, which under Italy's whitewash rule would exempt Crédit Agricole from a mandatory takeover offer. Shareholders other than Crédit Agricole would also need to back it, so the French group cannot push it through on its own votes.

That gives other investors a real say over whether a French bank ends up with near control of one of Italy's biggest lenders. Crédit Agricole is aiming to close in the second half of 2027.

European bank stocks rose on Monday after the proposal came out. The deal lands as euro area lenders brace for tighter money, with the ECB expected to lift its deposit rate to 2.75% in December.

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