Crédit Agricole proposes merger talks with Banco BPM, lifting its stake to about 45%

The proposal

Crédit Agricole has asked Banco BPM to open negotiations on a merger between the Milan-based lender and Crédit Agricole Italia. The proposal, announced in a note from Crédit Agricole on Monday, 9 November, is described as friendly and has been submitted to the board of directors of Banco BPM. The bank has confirmed that it received the proposal but has not commented further. A reverse merger, which the French side had reportedly favoured, did not prevail in the final version of the offer.

The combined group

The merged entity would become the third Italian banking group, with 6.5 million customers and more than 2,300 branches. Banco BPM would form its core, and the company would remain listed in Milan. The partners frame the project as a long-term industrial vision that would create a new Italian champion while preserving the identity and operating autonomy of the merged bank. The board would keep a majority of independent directors, and Giuseppe Castagna, the current chief executive of Banco BPM, would be confirmed as chief executive of the new group. The combination would also draw in the Italian life and non-life insurance businesses of Crédit Agricole.

Terms of the deal

Under the proposal, Crédit Agricole would raise its stake from the current 29.6% to about 45% of the post-merger capital, without reaching an absolute majority. Banco BPM shareholders would receive a 20% premium through the exchange ratio, calculated on the 2027 price-to-earnings multiple used to value Crédit Agricole's contributions. The package also includes an extraordinary dividend of one billion euros for current Banco BPM shareholders. The French group estimates annual pre-tax synergies of 800 million euros and an increase of about 24% in Banco BPM's earnings per share in 2027, based on assumptions set out in the proposal.

Current stake29.6%

Post-merger stake (approx.)45%

Current stake

29.6 %

Post-merger stake (approx.)

45 %

Data from the article text

Shareholder vote and tender offer

The transaction would require approval at a Banco BPM shareholder meeting with a two-thirds majority of the capital present. That majority would allow the deal to qualify for a so-called whitewash, which would exempt Crédit Agricole from the obligation to launch a public tender offer for the bank. The timing reportedly reflects a need to keep Banco BPM from becoming a target for other lenders. The shareholder vote is therefore also designed to prevent a tender offer from being launched.

What happens next

The Banco BPM board must now evaluate the proposal before any negotiations can move forward. If talks advance, the transaction could be completed in the second half of 2027. The proposal has already drawn attention across the Italian banking sector, with further developments expected later on the same day as the announcement.