Crédit Agricole Proposes Merger with Banco BPM

Crédit Agricole has pitched a merger between its Italian operations and Banco BPM to create Italy's third-largest banking group.

The proposed merger, announced by Crédit Agricole this week, offers Banco BPM shareholders a 20% premium based on an estimated valuation through a share exchange alongside a €1bn (US$1.12bn) dividend.

The French lender, which first invested in Banco BPM in 2022, described the proposal as a “friendly” deal that serves as a natural extension of the banks’ long-term partnership.

The deal would result in Crédit Agricole increasing its stake in Banco BPM to around 45%.

Interest from rival banks

Crédit Agricole's offer is the latest in a series of moves involving Banco BPM and rivals seeking consolidation.

Monte dei Paschi di Siena (MPS) shareholders rejected its board’s proposal to acquire Banco BPM last month.

Prior to the shareholder rejection, Crédit Agricole CEO Olivier Gavalda discussed the idea of a merger between MPS and Banco BPM, saying: “It is very difficult to see how a combination between MPS and Banco BPM can be value-accretive for Banco BPM shareholders.”

He added that Crédit Agricole – which has four seats on Banco BPM's board – would assess any proposal based on its merits, execution risks and ability to create long-term value.

Banco BPM was also the target of a takeover bid by UniCredit, one of the largest banking groups in Italy. However, UniCredit was forced to back away from the deal after facing opposition from Italian Prime Minister Giorgia Meloni.

If successful, the deal would establish Crédit Agricole as a major force in Italian banking and create a rare example of international consolidation in the banking sector, an industry where national boundaries often prove to be a challenge.

Financial projections from the merger

If Crédit Agricole were to succeed in merging with Banco BPM, the combined bank would remain listed in Milan, with Banco BPM’s current CEO Giuseppe Castagna retaining his leadership position. 

The French bank projects the combination would result in annual pre-tax synergies of €800m (US$895.6m).

Discussing the potential deal, RBC Capital Markets analyst Anke Reingen says: “The deal makes sense, but visibility on the financial implications for Crédit Agricole remains low.”

France’s banks have been keen to move away from a domestic market centred on fixed-rate loans – which do not benefit quickly from changes in interest rates – and to reduce their exposure to the French economy.

Crédit Agricole has slowly expanded its presence in Italy in recent years as it seeks to diversify beyond France's retail market. The proposed merger, if successful, could be completed in the second half of 2027, the company says.

Crédit Agricole partners:

Stellantis: Crédit Agricole partners with Stellantis through their joint venture Leasys to provide multi-brand operational vehicle leasing across Europe.
CEO: Antonio Filosa | Headquarters: Hoofddorp, North Holland, Netherlands

Worldline: Crédit Agricole partners with Worldline to offer innovative merchant payment processing services and point-of-sale solutions across France.
CEO: Pierre-Antoine Vacheron | Headquarters: La Défense, Île-de-France, France

Banco Santander: Crédit Agricole partners with Banco Santander in institutional asset servicing and custody operations through global strategic agreements and joint ventures.
CEO: Héctor Grisi Checa | Headquarters: Boadilla del Monte, Madrid, Spain