Credit Agricole, UniCredit explore joint Banco BPM breakup scenario in Italy

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Credit Agricole, UniCredit eye Banco BPM

Highlights

Credit Agricole and UniCredit are discussing a potential breakup of Banco BPM, with Credit Agricole possibly acquiring one third of the company.
Banks' maneuvering comes amid Monte dei Paschi di Siena's takeover interest in Banco BPM and Intesa Sanpaolo's attempts to acquire MPS, highlighting escalating consolidation pressures.
A foreign acquisition of Banco BPM, Italy's fourth-largest bank, remains politically sensitive ahead of the 2025 national election, as Credit Agricole holds a 29.3% stake and significant market influence.

Potential structure of a Banco BPM deal

As reported by Reuters, citing the Italian press, the potential coordinated move has been floated in conversations with Italian authorities while the two banks assess options in Italy's ongoing consolidation process. The sources, who spoke on condition of anonymity because the matter is confidential, said one scenario under discussion would see Banco BPM broken up, with UniCredit giving Credit Agricole roughly one third of the company.

Credit Agricole, UniCredit and Banco BPM all declined to comment. UniCredit failed to buy Banco BPM in 2025, partly because of Credit Agricole's opposition, and a person briefed on the matter said UniCredit's stated position as an observer in Italy's M&A manoeuvres has not changed.

That person added that UniCredit, after securing virtually half of the voting capital of Germany's Commerzbank following a two-year pursuit, has not ruled out skipping domestic consolidation altogether. Even so, the bank could still be interested in buying branches that rivals put up for sale when mergers go ahead.

Political and market implications in Italy

Banco BPM is also facing pressure from another front, having become a takeover target for Monte dei Paschi di Siena, which is itself trying to fend off an acquisition attempt by market leader Intesa Sanpaolo. Credit Agricole, Banco BPM's largest investor with a 29.3% stake, has opposed a Banco BPM-MPS tie-up and instead says it would support a combination between Banco BPM and its own Italian unit.

A foreign takeover of Italy's fourth-largest bank would be politically sensitive for Prime Minister Giorgia Meloni ahead of a national election next year. At the same time, UniCredit has built a 9% stake in insurer Generali as it seeks to preserve its domestic profile during the long Commerzbank pursuit, in a wider market reshuffle that could also affect holdings tied to MPS and Intesa.

Credit Agricole's finance chief Clotilde L'Angevin said in an interview with CNBC on Wednesday that the bank is remaining patient as it weighs different outcomes in Italy. She said the group is in a position to defend its interests and that no transaction can be done without it or against it.

Our earlier report on Italy’s dispute with ISTAT over the 2025 budget deficit described how confirmed data keeping the deficit at 3.1% of GDP intensified tensions between the government and the national statistics bureau ahead of next year’s election. We noted that the clash raised concerns about political pressure on independent institutions and kept Italy exposed to the EU’s excessive deficit procedure, a backdrop that can influence investor sentiment around Italian assets and policy choices.

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