Published: August 25, 2026 | Category: Deals & M&A

Italy’s oldest bank turns predator, offering its own shares for two rivals to grow too large for Intesa Sanpaolo to swallow.

Banca Monte dei Paschi di Siena has launched two all-share offers worth a combined €34bn for domestic rivals Banco BPM and Banca Generali, a defensive bid to make itself too big to be taken over by Intesa Sanpaolo. The Siena lender, the world’s oldest bank and until recently a ward of the Italian state, is offering only newly issued stock, valuing Banco BPM at €25.3bn and Banca Generali at €8.7bn.

The offers answer a roughly €36bn hostile approach that Intesa Sanpaolo, Italy’s largest bank, launched for Monte dei Paschi in June. By turning acquirer, chief executive Luigi Lovaglio is betting that a bank three times its former size will be far harder for Intesa to absorb. It is the boldest move yet in a consolidation wave that has redrawn the Italian banking map over the past two years.

Under the terms set out by the board, Banco BPM shareholders would receive 1.567 new Monte dei Paschi shares for each share they hold, an implied €16.729 a share that carries no premium to official prices on August 19. Banca Generali holders would get 6.958 new shares apiece, an implied €74.284 a share and a premium of about 10 percent on the same basis. Neither offer includes a cash component.

If both are fully accepted, and after the pending merger of Mediobanca into Monte dei Paschi, the bank’s existing shareholders would keep about 50.1 percent of the enlarged group. Banco BPM investors would hold about 37.2 percent and Banca Generali investors about 12.7 percent. The combined lender would rank as Italy’s third-largest by assets, behind Intesa and UniCredit, with a pro forma balance sheet of about €466bn, customer loans of €245bn and total financial assets of €810bn on a 2025 basis.

Monte dei Paschi told investors it expects annual run-rate pre-tax synergies of about €2.6bn, including roughly €0.8bn tied to the Mediobanca integration already under way. It put one-off integration costs at about €2.5bn before tax, to be booked between 2027 and 2029. The offers are conditional on regulatory clearance, approval by Monte dei Paschi shareholders and a minimum acceptance threshold of 50 percent of each target’s capital plus one share.

The two bids are not conditionally linked, meaning either could proceed without the other. The acceptance period could open in the first half of December and close in the first half of February 2027, according to the terms.

The manoeuvre caps a remarkable reversal for a bank that received a state bailout in 2017 and that Rome spent years trying to sell. Monte dei Paschi acquired Mediobanca last year, securing 62.3 percent of its shares, and is now using its recovered stock as an acquisition currency. Banco BPM, which bought asset manager Anima Holding and fended off an earlier approach from UniCredit, had itself explored a tie-up with Monte dei Paschi before dropping the idea this month amid opposition from its largest shareholder, Crédit Agricole.

Italy’s government, which retains an interest in the outcome, has said it wants a third national banking champion to sit alongside Intesa and UniCredit, and has signalled it does not want Monte dei Paschi broken up. Whether Intesa responds with a sweetened offer, and whether Banco BPM’s board and Crédit Agricole engage, will determine if Lovaglio’s gambit reshapes the sector or merely raises the price of his own bank.

Sources