Intesa Backs 3% Generali Stake Purchase Linked to €30.6bn MPS Buyout Bid
Intesa Sanpaolo’s Strategic Move in Italian Banking
MILAN, June 8 (Reuters) - Italy's biggest bank Intesa Sanpaolo said on Monday its board had approved buying a 3.01% stake in insurer Generali as part of its unsolicited €30.6 billion ($35 billion) bid to buy smaller rival Monte dei Paschi di Siena (MPS).
Details of the Generali Stake Purchase
"The transaction is purely financial in nature, is temporary and is anyway aimed at ensuring that the offeror may continue, following the successful completion of the offer, to use the equity method accounting treatment currently applied to the stake held by Mediobanca in Generali," Intesa said in a statement.
Hedging Derivatives Contract
• Intesa said its board approved the execution of a hedging derivatives contract with a "leading financial counterparty", with the stake in Generali as the underlying asset.
Background on Generali and Mediobanca Stakes
• MPS bought rival Mediobanca last year. The deal handed it a 13% stake in Generali, making it the biggest investor in the country's top insurer - a coveted asset in Italian finance.
Intesa’s Previous Attempts and Industry Context
• Intesa, whose business model is focused on wealth management and insurance, had attempted to buy Generali in 2017, but dropped the plan and grew its insurance business internally.
• Italy's second-biggest bank UniCredit last year built a large stake in Generali.
Financial Details and Reporting
($1 = 0.8679 euros)
(Reporting by Gianluca Semeraro; Editing by Valentina Za)
