MPS Launches €34 Billion Dual Bid for Banco BPM and Banca Generali as Italy's Bank Merger Wave Rolls On

Italy's banking sector looks less like a sleepy corner of European finance and more like a chess match with five boards playing at once.

On August 21, Monte dei Paschi di Siena (MPS) launched simultaneous all-share takeover bids for Banco BPM, valued at roughly €25.3 billion, and for Banca Generali, valued at about €8.7 billion, according to finews. Combined, the two offers total around €34 billion, or $40 billion, according to Reuters figures cited by Euronext. MPS CEO Luigi Lovaglio called the move a "natural partner for a friendly aggregation" and projected combined annual pre-tax synergies of about €2.6 billion.

This is not MPS playing offense for the fun of it. In June, Intesa Sanpaolo, Italy's largest bank, launched its own unsolicited bid for MPS. Euronext put the value of that offer at approximately €30.6 billion cash-and-share; finews reported the figure at around €36 billion when it was submitted. The gap likely reflects normal swings in an all-share offer's value as stock prices move, but either way, MPS management rejected the approach outright.

Under Intesa's plan, per Euronext, the combined bank would become the euro zone's second-largest lender by market value, trailing only Spain's Banco Santander. Intesa would then sell roughly half of the MPS retail network it absorbed to insurer Unipol, which would fold it into Unipol-backed lender BPER Banca and keep operating it under the Monte dei Paschi brand. It's a genuinely strange structure, and it shows how tangled these deals have become.

Rome has its own reservations. According to finews, the Italian government fears further concentration in the domestic banking market if Intesa succeeds in swallowing MPS. Fewer, bigger banks can mean less competition and fewer choices for depositors and small businesses. No EU or Italian competition authority has announced a formal antitrust review or blocked any of these deals. The government's discomfort is political signaling so far, not regulatory action.

Because Intesa's bid for MPS is already on the table, Italian takeover rules require at least two-thirds of MPS shareholders to approve the Banco BPM and Banca Generali offers. That vote is scheduled for October 29, according to Euronext.

Banco BPM's board isn't simply along for the ride. Euronext reports that BPM had earlier invited MPS to discuss a "merger of equals," but ended those talks after France's Crédit Agricole, BPM's largest shareholder with a 29.3% stake, expressed disapproval. Crédit Agricole's posture now looms over whether MPS's hostile-adjacent bid for BPM can actually close.

Meanwhile, a separate but connected deal cleared a major hurdle. On Thursday, September 3, MPS said it received European Central Bank approval to fully merge Mediobanca, the merchant bank it acquired for €16 billion last September, into the MPS group itself, according to Global Banking & Finance Review, citing Reuters. Both banks' boards had approved the merger plan back in March, setting an exchange ratio of 2.450 MPS shares per Mediobanca share and targeting roughly €0.7 billion in synergies. The plan calls for delisting Mediobanca while retaining its brand for corporate and private banking, with full effectiveness targeted by the end of 2026.

That Mediobanca deal matters beyond MPS's balance sheet. Through it, MPS picked up a roughly 13% stake in insurer Generali, according to finews, making MPS a major player in a company that itself controls Banca Generali, the wealth manager MPS is now bidding to acquire outright. Banca Generali was previously the target of a failed Mediobanca bid last year while Mediobanca itself was under siege from MPS. In other words, the hunter became the prize became the hunter again.

If both new bids succeed, MPS would end up with a pro forma balance sheet of about €466 billion and more than €810 billion in assets under management or administration, according to finews, making it Italy's third-largest banking group. MPS shareholders would also receive a €4 billion extraordinary distribution, paid partly in cash and partly in Generali shares.

Italy isn't the only front. UniCredit, Italy's second-largest bank, has spent nearly two years pursuing Germany's Commerzbank, first approaching it in September 2024 and now holding a 47.6% stake, or 49.7% of voting rights excluding treasury shares, according to Euronext. It's doing so despite continued German political resistance to a foreign takeover of a domestic lender, a dynamic that raises questions about how open Europe's banking market really is to cross-border consolidation.

Smaller deals have closed too. Elliott-backed Banca CF+ completed a €145 million takeover of Banca Sistema in March, per Euronext, a modest deal by comparison but part of the same broader restructuring of Italian finance.

CNBC frames the whole wave as a test of whether Europe can build banks large enough to compete with U.S. rivals, a goal European policymakers have pushed for years. Whether that happens through MPS, Intesa, or UniCredit, or falls apart in shareholder votes and government pushback, will start to become clear when MPS shareholders vote on October 29 and again as UniCredit's Commerzbank standoff plays out. MPS is targeting a mid-February 2027 completion for the Banco BPM and Banca Generali deals, according to Euronext Live, meaning the outcome of Italy's biggest banking shake-up in years is still months from settled.