Crédit Agricole Tables €1 Billion Dividend and 20% Premium to Fold Italian Unit Into Banco BPM
Crédit Agricole Tables €1 Billion Dividend and 20% Premium to Fold Italian Unit Into Banco BPM #
France’s Crédit Agricole has formally submitted what it describes as a “friendly” proposal to Banco BPM’s board of directors to combine its Italian banking subsidiary, Crédit Agricole Italia, with the Milan-listed lender, a deal that it says would produce Italy’s third-largest banking group.
The proposal, submitted on Monday, asks Banco BPM to open negotiations on the structure and terms of a potential all-share merger. Rather than offering a headline premium to Banco BPM’s market price, Crédit Agricole has proposed an exchange ratio that values Banco BPM 20% above its own contributed businesses, calculated on estimated 2027 price-to-earnings multiples. Alongside the share swap, Banco BPM shareholders would receive a €1 billion extraordinary dividend as part of the transaction, according to reporting by Investing.com.
If the deal proceeds, Crédit Agricole’s stake in Banco BPM would increase from 29.6% to approximately 45%, without triggering a mandatory full takeover bid. To achieve that, the transaction would require a two-thirds “whitewash” vote by Banco BPM shareholders at a general meeting to secure an exemption from the mandatory-offer threshold. Additional hurdles include sign-off from the European Central Bank and a review under Italy’s “golden power” legislation, which gives Rome oversight of strategic-sector acquisitions. Crédit Agricole said it expects integration to be completed in the second half of 2027, subject to regulatory clearances.
On a combined basis, the new group would serve roughly 6.5 million customers through a network of more than 2,400 branches. Crédit Agricole Italia would contribute approximately 2.9 million customers and around 1,000 branches, while Banco BPM would add 3.6 million customers and 1,400 locations. The proposal also covers Crédit Agricole’s Italian insurance businesses, both life and non-life, which would extend the combined entity’s reach beyond banking.
Crédit Agricole projects annual pre-tax synergies of around €800 million from the combination and estimates that the deal would boost Banco BPM’s 2027 earnings per share by approximately 24%. The merged bank would remain listed on the Milan stock exchange, with Banco BPM described as being “at the heart” of the new entity, according to Retail Banker International. Current Banco BPM chief executive Giuseppe Castagna would retain his role, and the board would continue to hold a majority of independent directors.
The two institutions have operated under a long-term strategic partnership, and Crédit Agricole has been steadily building its stake in Banco BPM as part of its Italian expansion strategy. Banco BPM’s board is expected to evaluate the proposal before any formal negotiations begin.
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