Intesa Sanpaolo Plans to Create One of Europe's Largest Banks Through 35-Billion Deal

Italy's largest bank, Intesa Sanpaolo, has submitted a proposal to acquire competitor Monte dei Paschi di Siena (MPS) for €30.6 billion.

According to the offer, MPS shareholders will receive 1.6 Intesa Sanpaolo shares plus an additional €1 per share. This represents approximately 12.5% more than MPS's recent market price.

Intesa Sanpaolo's goal is to strengthen its position both in Italy and across the eurozone. Upon completion of the deal, the bank will rank even higher among Europe's largest financial institutions by market value.

MPS is a bank with a particularly unique history. It is one of the world's oldest banks operating today and was saved by government assistance in 2017 due to financial difficulties. In recent years, the bank has returned to private sector ownership.

To preempt possible regulatory questions, Intesa has already reached an agreement with insurance company Unipol. Under the plan, hundreds of MPS branches will be transferred to Unipol, which will mitigate risks related to competition concerns.

Intesa also plans to retain stakes in Mediobanca and Generali, which are among MPS's significant assets. The bank's CEO Carlo Messina is confident that he will secure shareholder support and that the merged group's net profit will reach €16 billion by 2029.

Source: Investing.com