Italy's banking consolidation sees new progress. Banco BPM stated locally on Sunday that it will invite Banca Monte dei Paschi di Siena (MPS) to discuss a potential merger. If the deal proceeds, the combined banking group is expected to have a market capitalization of approximately €50 billion in Milan, surpassing UniCredit to become Italy’s second-largest bank.
The combined market capitalization is approximately €50 billion.
Banco BPM stated that if completed, the merged entity will be structured with equal weighting between the two parties. The bank did not disclose more specific transaction details, but expects earnings per share to increase by more than 10%, primarily driven by pre-tax synergies exceeding €1.1 billion annually.
This suggests that, following a wave of mergers and acquisitions last year, the Italian banking sector may be poised for another round of consolidation. The possibility of a merger between Banco BPM and MPS has been widely discussed in the market before, and now that Banco BPM has formally extended an invitation for negotiations, this prospect has moved into a substantive discussion phase.
UniCredit attempted to block the relevant transaction.
This potential transaction also reshapes the competitive landscape among Italy’s major banks. Previously, UniCredit had attempted to prevent Banco BPM from drawing closer to MPS.
In November 2024, the Italian government completed the re-privatization of MPS and brought in domestic investors as core shareholders, with Banco BPM also becoming an investor in MPS at that time. The market’s expectations regarding a potential merger between BPM and MPS prompted UniCredit to launch a takeover offer to Banco BPM.
However, this acquisition proposal ultimately failed in July 2025, though it had previously limited Banco BPM’s ability to pursue other merger and acquisition activities.
MPS has not yet made a public response.
As of now, MPS has not immediately commented on Banco BPM’s statement. According to individuals close to the matter, MPS’s board is scheduled to meet on Monday, which will be its first formal opportunity to discuss the issue.
Based on disclosed information, Banco BPM has currently only expressed its willingness to advance negotiations and emphasized that both parties would have equal weight in the new entity following the merger. Whether the transaction progresses to a more advanced stage still depends on the stance of MPS’s board and the outcome of subsequent negotiations.