Italy Government Remains Neutral as MPS Faces Major Merger and Acquisition Moves
Government Position and Recent Developments in Italian Banking Sector
By Giuseppe Fonte
Government Neutrality on MPS Mergers
ROME, June 8 (Reuters) - The Italian government will take a neutral stance regarding merger and acquisition moves targeting bank Monte dei Paschi di Siena (MPS) , two sources familiar with the matter said on Monday.
Major Bids and Interest in MPS
Intesa Sanpaolo's Unsolicited Bid
Italy's top banking group Intesa Sanpaolo made a €30.6 billion ($35 billion) unsolicited cash-and-share bid on Monday to buy smaller rival Monte dei Paschi to create the euro zone's second-largest lender.
Banco BPM's Merger Intentions
Amid mounting expectations of an Intesa bid, Banco BPM, Italy's fourth-largest bank, said on Sunday it wanted to open talks with MPS about a potential merger.
Government's Historical Role and Legal Powers
Restored Value and Previous Bailout
The Economy Ministry issued a brief statement on Monday saying it had been informed of the moves on MPS, which it said reflected the restored value of the bank, which the government had bailed in 2017 when it faced bankruptcy.
Golden Powers and Legislative Stance
Italy has so-called "golden powers" allowing the government to rein in bank merger deals, but one of the sources said Prime Minister Giorgia Meloni's government would not use the legislation to derail Intesa's takeover plans.
Political Reactions and Influences
Intesa's Institutional Outreach
Intesa's CEO Carlo Messina told reporters on Monday that before making his move on MPS he had reached out to "various institutional players," though he said he had not talked to Meloni.
League Party's Historical Support
Matteo Salvini's co-ruling League Party has in the past expressed its support for a merger between Banco BPM and MPS to create the country's second-largest lender based in the north of the country, which is the League's heartland.
Declining Influence of the League Party
However the League's support has declined steadily in recent years, reducing its political weight and the prospects that it may try to impose its will over Meloni regarding the future of MPS.
(Reporting by Giuseppe Fonte, editing by Gavin Jones)
