Italian Banking Giant in the Making: Banco BPM Pitches $58 Billion Merger to MPS, Aiming to Overtake UniCredit

Last updated: June 7, 2026 11:24 pm

1 week ago

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Banco BPM has extended an invitation to Banca Monte dei Paschi di Siena (MPS) to discuss a potential “merger of equals,” aiming to create Italy’s second-largest banking group, valued at an estimated $58 billion. This strategic move, which could yield over 10% EPS growth for Banco BPM and spark a new wave of M&A in Italian banking, seeks to surpass UniCredit in market size. The announcement initiates a crucial period for MPS, with its board set to review the proposal soon, following previous attempts by UniCredit to block such a consolidation.

In a significant development poised to reshape Italy's financial landscape, Banco BPM announced on Sunday its intention to initiate discussions with Banca Monte dei Paschi di Siena (MPS) regarding a potential strategic tie-up. This proposed merger aims to create the nation's second-largest banking conglomerate, a move that would strategically position the new entity ahead of current rival UniCredit in terms of market capitalization.

A Banco BPM SpA bank branch in Milan, Italy, on Nov. 15, 2024.

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The long-discussed deal, which has reportedly faced previous opposition from UniCredit, is projected to establish a combined group valued at approximately 50 billion euros ($58 billion) on the Milan bourse. Banco BPM anticipates that this merger could significantly boost its earnings per share by more than 10%, driven by an estimated annual pre-tax synergy benefits exceeding 1.1 billion euros.

This announcement is widely seen as a potential catalyst for a renewed wave of consolidation within the Italian banking sector, following a flurry of merger and acquisition activities experienced just last year.

The board of Banco BPM, which includes representatives from its primary shareholder, France's Credit Agricole, unanimously approved the decision to formally express interest to MPS. Their objective is to explore a "merger of equals," signaling a commitment to a balanced integration of both institutions.

While specific details concerning the deal's structural framework were not immediately disclosed, Banco BPM emphasized that it intends for both groups to hold equal weight and representation within the new combined entity.

As of now, MPS has not issued an immediate public response to Banco BPM's announcement. However, a board meeting scheduled for Monday presents the first official opportunity for MPS leadership to deliberate on this significant proposal, according to sources close to the matter.

Banco BPM's involvement with MPS has roots in November 2024, when the Italian government completed the reprivatization of the bailed-out Tuscan bank, bringing in domestic investors as core shareholders. It was around this period that the prospect of a BPM-MPS tie-up previously prompted UniCredit to launch its own takeover offer for Banco BPM. Although UniCredit's bid ultimately failed in July 2025, it effectively prevented Banco BPM from pursuing alternative M&A opportunities at that time.