Credit Agricole, Banco BPM Ramp Up Study of Possible Italy Deal
Credit Agricole, Banco BPM Ramp Up Study of Possible Italy Deal
(Bloomberg) -- Credit Agricole SA and Italy’s Banco BPM SpA are studying strategic options including a merger with the French bank’s Italian unit, people with the knowledge of the matter said.
The banks signed a non-disclosure agreement as their advisers examine a possible deal, the people said, asking to not be named because the process is private. Banco BPM is being advised by Lazard, they said.
One of the options is an all-stock deal that would make Credit Agricole the biggest shareholder in a joint business. In that scenario, Banco BPM would issue new shares to take over the French bank’s Italian assets after they have been spun off into a separate holding company, according to the people.
Banco BPM is also in contact with UniCredit SpA and discussions with other Italian banks are ongoing, the people said. The talks are still preliminary and may not result in any deal, they said.
A spokeswoman for Banco BPM declined to comment, representatives for Credit Agricole, UniCredit and Lazard also wouldn’t comment.
Italian banking consolidation shifted into high gear earlier this year with Intesa Sanpaolo SpA’s takeover of Unione di Banche Italiane SpA. The momentum moved to Spain, where CaixaBank SA agreed to buy Bankia SA and smaller lenders Unicaja Banco SA and Liberbank SA revived merger talks that had stalled last year.
Banco BPM Chief Executive Officer Giuseppe Castagna said last week he expects further consolidation in Italian banking, saying the Intesa deal with UBI “must lead all of us to think about additional consolidation.”
Credit Agricole has an existing consumer finance joint venture with Banco BPM that has has a market value of 2 billion euros ($2.3 billion). In 2018, the two lenders announced that they may list the firm called Agos Ducato in the following years and Banco BPM would have the option of reducing its current 39% stake to as little as 10% if a listing went ahead.
Il Messaggero reported the intensified contacts between the banks earlier. Bloomberg reported in September that Credit Agricole is searching for potential takeover targets in Italy.
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