Banco BPM abandoned efforts to merge with Banca Monte dei Paschi di Siena on Friday, July 31, 2026, after its main shareholder, Credit Agricole, rejected the plan. The collapse of these talks removes a primary obstacle for Intesa Sanpaolo, which has launched a €30.66 billion ($35.32 billion) takeover bid for the historic lender.
The decision by Banco BPM to halt discussions comes nearly two months after it first sent a proposal to Monte dei Paschi. While BPM maintained that a tie-up held strong potential strategic and industrial rationale
and would have created significant value, the bank admitted that the necessary conditions for an agreement were not met.
The deadlock was cemented by France’s Credit Agricole. As the main shareholder of BPM, Credit Agricole stated it saw no value in the merger and expressed a preference to instead combine its own Italian unit with Banco BPM. This internal friction effectively killed the prospect of a merger of equals
that the Italian government had previously promoted to create a third large banking player to rival Intesa and UniCredit.
Intesa Sanpaolo’s €35 Billion Takeover Strategy
With the BPM merger off the table, Intesa Sanpaolo is positioned as the primary suitor. Intesa’s unsolicited offer, valued at roughly €35 billion, is designed to cement its status as Italy’s largest bank and potentially create the second-largest bank in the eurozone by market value.
The bid is structured with a mix of equity and cash: Intesa offered 1.6 of its own shares and 1 euro in cash for every Monte dei Paschi share. Based on closing prices from the Friday preceding the June 8 announcement, this valued the target at 10.091 euros per share, representing a 13% premium.
To navigate antitrust hurdles, Intesa’s proposal includes a strategic carve-out. The bank plans to sell the Monte dei Paschi brand, 635 branches, and associated central operations to Unipol Assicurazioni in a deal valued between 3 billion and 3.5 billion euros. Intesa intends to keep approximately 625 branches and the Mediobanca brand, which Monte dei Paschi acquired last year. These retained assets accounted for roughly 80% of the combined net profit for Monte dei Paschi and Mediobanca in the previous year.
The Conflict Between BPM and Credit Agricole
The failure of the BPM bid was not merely a matter of timing but a fundamental disagreement over value. While BPM had envisioned a combined market value exceeding 50 billion euros (including synergies), Credit Agricole CEO Olivier Gavalda dismissed reports of an imminent merger announcement as completely false
.
This tension highlights a divergence in strategy. BPM sought a merger of equals that would preserve respective brands and territorial roots while generating cost savings of more than 650 million euros and revenue synergies above 450 million euros. Credit Agricole, however, viewed the tie-up as lacking value, preferring a more direct integration of its own Italian assets with BPM.
Monte dei Paschi’s Defensive Position
Banca Monte dei Paschi di Siena now finds itself at a crossroads. The bank has not formally rejected Intesa’s offer, though it has described the bid as insufficient. Following the collapse of the BPM talks, Monte dei Paschi agreed to end preliminary consultations and stated it will continue to assess all strategic options.
The bank’s internal benchmark for any alternative to Intesa’s deal is clear: it must create more value for shareholders. Specifically, the €3 billion cash component of Intesa’s bid serves as the baseline for any competing offer.
This struggle for control occurs against a broader backdrop of Italian banking consolidation. The government, which rescued Monte dei Paschi in 2017, had hoped for the BPM merger to create a stable third pillar in the market. However, the sector remains volatile; UniCredit, Italy’s second-biggest bank, attempted a takeover of BPM in late 2024 that failed due to government conditions and target rebuffs, and is currently focused on a hostile takeover of Germany’s Commerzbank.
If Intesa’s bid proceeds, the bank expects to realize 1.5 billion euros in annual cost savings by 2029 and 1.4 billion euros in revenue synergies. The integration would involve significant workforce shifts, with Intesa projecting 6,800 voluntary employee exits—including 5,000 from current operations—while simultaneously hiring 6,800 young employees.
The immediate focus now shifts to whether Monte dei Paschi can find a third alternative or if it will eventually succumb to Intesa’s bid to avoid further instability.
