Crédit Agricole’s stake in Italy’s Banco BPM sparks bid speculation

  • Becomes #1 investor, analysts expect eventual full takeover
  • Says he didn’t ask for permission to go above 10%
  • Banco BPM looking for a merger partner
  • UniCredit had prepared an offer for Banco BPM before the war

MILAN, April 8 (Reuters) – France’s Credit Agricole (CAGR.PA) has become the biggest investor in Banco BPM (BAMI.MI) after buying a 9.2% stake, raising the prospect of a a full takeover bid and the shipment of shares in Italy’s steeply rising third-lender company.

This decision strengthens the French group’s exposure to its main foreign market, where it plays an active role in the ongoing banking consolidation.

While Credit Agricole said it had not sought supervisory approval to exceed 10%, analysts pointed to the gradual build-up of a stake since 2018 that preceded its $1 billion takeover. regional Italian lender Credito Valtellinese (CreVal) in 2021.

Join now for FREE unlimited access to Reuters.com

Register

“We believe this is the first step that will see the French peer sooner or later take control of Banco BPM. We have seen the same process for CreVal,” Bestinver said.

Crédit Agricole had no comment. Two people familiar with the deal said the rationale for the deal was to grow business lines, not to gain business footprint.

Banco BPM has long been on the hunt for a merger partner, with CEO Giuseppe Castagna seen as keen his bank not be swallowed up by a bigger rival.

Under Italian rules, a full takeover of Banco BPM by Credit Agricole would require the approval of the Italian government and political sources said the investment angered Italy’s League party, traditionally seen as close to Castagna.

A strong presence in Italy’s wealthy Lombardy region had made Banco BPM an attractive target for heavyweight UniCredit (CRDI.MI), which had prepared a takeover bid before the war in Ukraine and is now busy managing its large Russian exposure, sources told Reuters. Read more

Banco BPM’s €200 billion in assets ($217 billion) at the end of 2021 compares to Crédit Agricole Italy’s €116 billion.

The two lenders held merger talks in 2020 which went nowhere. Banco BPM has also unsuccessfully sought to complete what has been described as a “merger of equals” with rival BPER Banca (EMII.MI).

CONSUMER FINANCING

After losing almost a fifth of its value since the start of the conflict, Banco BPM has a market capitalization of just over 4 billion euros, giving Crédit Agricole’s stake a value of around 380 million euros. euros.

Banco BPM shares were up 13% at 1500 GMT. Crédit Agricole lost 0.5%.

The French lender said the investment, made through the purchase of shares on the market and through a transaction with a leading international bank, would not have a significant impact on its funds ratio. basic clean.

Already linked to Banco BPM through a long-standing joint venture in the consumer finance sector, Crédit Agricole said the deal reinforces its “strong relationship” with Banco BPM and aims to broaden the reach of their strategic partnerships. .

It also shows appreciation for Banco BPM’s “strong franchise”, its good financial outlook and “strong and successful management team”, he said.

Crédit Agricole’s Italian business dates back to 2007. Ten years later it took over three small bankrupt banks for 130 million euros, while in 2016 its asset manager Amundi (AMUN.PA) bought Pioneer Investments to UniCredit for 3.6 billion euros.

With Amundi’s distribution deal with UniCredit expiring in 2026, analysts said Credit Agricole was working to secure an alternative sales channel.

Banco BPM owns 19.4% of Italian asset manager Anima (ANIM.MI), whose shares rose 8% on speculation it could also play a role in any tie-up.

Banco BPM said the purchase of the stake was not previously agreed between the two banks.

“The quality and importance of the investor, as well as the appreciation he expressed for our bank (…) represent a clear recognition of the value and potential of Banco BPM,” the Italian bank said. .

($1 = 0.9202 euros)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Valentina Za and Andrea Mandala in Milan; Additional reporting by Giuseppe Fonte in Rome; Editing by David Holmes and Emelia Sithole-Matarise

Our standards: The Thomson Reuters Trust Principles.