Crédit Agricole proposed, on Monday 9 November, to merge its Italian subsidiary with Banco BPM. The French group wants to increase its participation to about 45% of the new set. It presents a project that would form Italy’s third bank, with 6.5 million customers. The transaction remains subject to the examination of Banco BPM, the vote of its shareholders and the competent authorities.
The announcement aims to open negotiations on the reconciliation of two networks already established in the country. Banco BPM would remain at the centre of the merged group and maintain its rating in Milan. Crédit Agricole also plans to contribute its Italian insurance activities. The planned timetable leads to the second half of 2027, if conditions are met.
Crédit Agricole and Banco BPM : a reconciliation by contributions
The proposal concerns Banco BPM and Crédit Agricole Italia, not a merger of the entire French group with the Italian bank. Crédit Agricole S.A. would bring activities to the new set and receive in return an increased share in its capital. The 9 November press release indicates a current participation of 29.6%, which would rise to about 45%.
Banco BPM still posted 29.30% on its shareholding page updated on October 15. The figure announced on Monday is therefore more recent. The 45% share is a target after the contributions have been made. It does not describe the participation held today.
The assembly leaves an important place for the other shareholders of Banco BPM. With less than half of the capital, Crédit Agricole alone would not hold the absolute majority of the shares. The announced governance arrangements provide for a majority of independent directors. The current Managing Director of Banco BPM, Giuseppe Castagna, would lead the group resulting from the rapprochement.
An Italian network of more than 2,300 agencies
The announced perimeter would bring together more than 2,300 agencies. The French group promises to maintain the Italian identity and operational autonomy of the new set. This organisation would associate the neighbourhood bank with the life insurance and damage insurance businesses provided by Crédit Agricole.
For customers, the concrete issue would be the integration of a banking distribution network and a wider range of financial services. For establishments, the economic interest lies in the possibility of offering several products to the same clientele. A bank customer can purchase insurance or access a savings management offer in the same group.
These business prospects do not yet inform about changes in each agency. The announcement does not detail an account migration schedule or new pricing for individuals. Nor does it list closures. As a result, clients do not have an operational transformation programme at this stage.
eur 800 million announced synergies
Crédit Agricole estimates annual synergies at EUR 800 million before taxes. It estimates that the transaction could increase Banco BPM’s profit per share by around 24% in 2027. This estimate implies the full effect of synergies: it is not an already achieved result.
Synergy refers to an expected gain in reconciliation, for example through shared costs or additional revenues. It must then be obtained in the accounts. The expenditure needed for integration and the pace of implementation influence the actual result.
The French bank also offers an exceptional dividend of EUR 1 billion to Banco BPM’s current shareholders. The exchange report envisaged includes a 20% premium. This premium is based on a comparison of multiple expected benefits for 2027 used to value contributions. It does not automatically correspond to a 20% higher cash offer at the last stock exchange price.
Shareholders’ vote and authorisations remain decisive
The project must take several steps. The Board of Directors of Banco BPM must first assess the proposal. The precise legal structure remains to be defined between the parties. Crédit Agricole then provides for approval by the extraordinary assembly of the Italian bank.
The intended assembly includes a derogation from the requirement to submit a public offer, according to a « whitewash » procedure. The communiqué sets out a double lock: the majority required for the merger and protection of other shareholders during the vote on the derogation. Therefore, the contribution of activities alone will not be sufficient to bring French participation to the target level.
Crédit Agricole finally cites the authorisation of the European Central Bank and the application of the Italian regime for the control of strategic investments, called « golden power ». These steps may affect the implementation conditions and timing. The second half of 2027 is the deadline proposed by the French group. The next expected decision concerns Banco BPM’s response to the opening of the discussions.
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