MPS, Banco BPM in Merger Talks Following Lovaglio’s CEO Reappointment
Background and Recent Developments in the Italian Banking Sector
Initial Merger Discussions and CEO Reappointments
ROME, May 28 (Reuters) - Italy's Monte dei Paschi di Siena (MPS) and rival Banco BPM held talks about a long-mooted potential merger shortly after Luigi Lovaglio was reappointed as MPS CEO in April, Italian news agency Adnkronos reported on Thursday.
Historical Context and Government Interest
• A tie-up between the country's third and fourth-largest lenders has been considered a possibility for many years, with successive governments in Rome keen to build a third sizeable player in Italian banking, alongside UniCredit and Intesa Sanpaolo.
Recent Investments and Takeover Attempts
• Fuelling expectations of a deal, Banco BPM invested in MPS in November 2024. The move triggered a takeover attempt from UniCredit which tried, as a countermove, to acquire BPM, but failed.
Leadership Changes and Strategic Directions
• The CEOs of BPM and MPS were both handed a new mandate in April.
• BPM CEO Giuseppe Castagna said after his reappointment that MPS remained a merger possibility for his bank, but the timing could be an issue.
MPS’s Acquisition of Mediobanca
• MPS last year bought Mediobanca and is working to complete the integration by the end of 2026. Lovaglio has repeatedly said MPS is focused on Mediobanca.
Merger Contacts and Market Reactions
• Citing financial sources, Adnkronos reported that there had been merger contacts after last month's annual general meeting at MPS.
• Reuters could not verify the report.
Advisory Roles and Accelerated Contacts
• Earlier on Thursday, Corriere della Sera daily also said contacts had accelerated, adding BPM may hire Goldman Sachs as an adviser in addition to Lazard and Citi.
Shareholder Dynamics and Merger Concerns
• MPS' second-largest investor, billionaire Francesco Gaetano Caltagirone, who wanted to replace Lovaglio as CEO, warned this month about the terms of a possible BPM-MPS merger, saying MPS risked being "absorbed" by BPM.
Major Shareholders and Voting Influence
• France's Credit Agricole is the main shareholder in BPM, which in turn owns 3.7% of MPS.
• BPM played an important role in swinging the balance in favour of Lovaglio at the April 15 shareholder vote to pick a new CEO, in a defeat for Caltagirone who voted against Lovaglio's reinstatement.
Reporting Credits
(Reporting By Gavin Jones, editing by Gianluca Semeraro and Valentina Za)
