UniCredit's offer for Banco BPM is the latest chapter in Italy's stop-start banking consolidation, though hopes of wider consolidation remain complicated by obstructive shareholder structures. A successful bid would narrow the gap between UniCredit, Italy's number two bank, and its larger domestic rival Intesa Sanpaolo, which strengthened its hold on the top spot with its 2020 purchase of Union di Banche Italiane, then Italy's fourth largest lender. Intesa's deal had been expected to prompt a surge in deals, though that failed to materialize in part due to strategically defensive holdings in mid-sized banks by insurance companies and bancassurance agreements, which S&P Global Ratings expects will continue to complicate hostile bids for Italian banks.
What's Happening
On November 25, UniCredit launched an unsolicited, all-share offer worth about €10.1 billion for Banco BPM, Italy's third-largest bank. The offer came just a few days after Banco BPM had launched an offer for asset manager Anima Holding SpA and bought a 5% stake in another Italian bank, Banca Monte dei Paschi di Siena, from the Italian Government. Banco BPM, on November 26, rebuffed UniCredit's bid, claiming that it was too low and would limit the target's strategic options.
Why It Matters
Intesa Sanpaolo's competitive advantage in Italy is almost unparalleled in comparable banking sectors. Besides being the largest domestic commercial bank, with about 20% market share in deposits and loans (ahead of UniCredit at 9% and Banco BPM at 5%-6%), the group is also the leading domestic player in life insurance, private banking, and wealth management, all by a wide margin to its domestic rivals.
UniCredit's acquisition of Banco BPM would reduce Intesa Sanpaolo's lead and could reshape the Italian banking sector. UniCredit would strengthen its market position in the wealthier Northern Italy and expand the scope of financial products that it can offer. An all-share deal would also have limited impact on the enlarged group's capital, while offering upside from cost and revenue synergies (estimated by UniCredit at €900 million and €300 million, respectively).
Italy's banking sector is evolving, and further consolidation seems inevitable. We continue to expect the banking sector will eventually be split between large players with the scale, revenue diversification, and earning capacity to fund the innovation needed to successfully navigate the digital transition, and smaller, agile banks able to rapidly adapt to changing customer behaviors.
What Comes Next
The outcome of the offer remains highly uncertain and dependent on several factors, including the reactions of different stakeholders. Credit Agricole's 9.2% stake in Banco BPM means it is the key player and has a strategic decision to make, given its commercial interests and established presence in Italy, as well as its distribution agreements with UniCredit. It is also unclear if there could be alternative options for Banco BPM, including counter offers, or if there could be complications due to its recent acquisition of a stake in Monte dei Paschi from the Italian government (which was purchased at the same time as Anima and Italian entrepreneurs also bought stakes). Finally, we cannot rule out a change to the terms of UniCredit's offer to make it more attractive.
Related Research
- European Banks Will Pull Multiple Levers To Protect Operating Performance In 2025-2026, Nov. 26, 2024
- UniCredit Opens Another Door For Inorganic Growth With Launch Of Offer For Italian Banco BPM, Nov. 25, 2024
This report does not constitute a rating action.
| Primary Credit Analyst: | Mirko Sanna, Milan + 390272111275; mirko.sanna@spglobal.com |
| Secondary Contacts: | Luigi Motti, Madrid + 34 91 788 7234; luigi.motti@spglobal.com |
| Francesca Sacchi, Milan + 390272111272; francesca.sacchi@spglobal.com | |
| Elena Iparraguirre, Madrid + 34 91 389 6963; elena.iparraguirre@spglobal.com |
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