Italy’s Banco BPM, announced on Sunday that it will invite Banca Monte dei Paschi di Siena, to talk about a possible merger that would make the nation’s second-largest banking company, surpassing UniCredit.
A conglomerate valued at about €50 billion ($58 billion) on the Milan exchange would result from the long-mooted acquisition, which UniCredit has attempted to thwart. Banco BPM predicted that pre-tax benefits of over €1.1 billion would cause an increase in earnings per share of over 10%.
Following a surge of M&A activity last year, the announcement may launch a second wave of dealmaking in Italian banking.
A proposal to show interest in a “merger of equals” with MPS has been unanimously approved by Banco BPM’s board, which includes members of France’s Credit Agricole, the company’s primary shareholder.
The bank just stated that it would give both groups equal weight in the combined business, without providing any information about the deal’s structure.
MPS will have a first chance to debate the issue at a board meeting on Monday.
When the Italian government finished reprivatizing the bailed-out Tuscan bank in November 2024 and added domestic investors as primary shareholders, Banco BPM became a stakeholder in MPS.
At the time, UniCredit made a buyout offer for Banco BPM due to the possibility of a BPM-MPS alliance. Although the proposal ultimately failed in July 2025, it stopped the target from exploring other M&A opportunities.
