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Crédit Agricole S.A. has proposed to Banco BPM S.p.A. that the two groups open discussions on a merger between Banco BPM and Crédit Agricole Italia.
The friendly proposal has been submitted to the Board of Directors of Banco BPM for evaluation. The combined entity would be built around Banco BPM and would remain listed in Milan.
According to Crédit Agricole, the transaction would create Italy's third-largest banking group, serving 6.5 million customers through more than 2,300 branches. The combined entity would be a fully integrated Italian financial services group and would also receive Crédit Agricole's Italian Life and Non-Life insurance businesses.
The proposal sets out a governance structure in which the Board of Directors would continue to have a majority of independent members, and Banco BPM's current CEO would be confirmed as CEO of the combined entity.
For Banco BPM shareholders, the proposal provides for an exchange ratio reflecting a 20% premium, based on the 2027 estimated P/E multiple used to value the Crédit Agricole businesses being contributed, together with an extraordinary dividend of €1 billion paid to Banco BPM's current shareholders.
Crédit Agricole estimates pre-tax synergies at €800 million a year and expects the deal to lift Banco BPM's earnings per share by around 24% in 2027, based on pre-tax run-rate synergies.
Through its contributions, Crédit Agricole would increase its holding from its current 29.6% stake in Banco BPM to approximately 45% of the combined entity.
The proposed transaction would be conditional on approval by Banco BPM's extraordinary general meeting under the so-called "whitewash" procedure, which would exempt Crédit Agricole from the obligation to launch a mandatory tender offer, and on customary approvals, including authorisation by the European Central Bank and under Italy's "golden power" regime. Crédit Agricole said the transaction could be completed in the second half of 2027.
Crédit Agricole Italia employs 12,400 people and serves 2.9 million customers through a network of 1,000 branches.
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