In response, MPS has made a much more ambitious move: it has launched two simultaneous all-share offers for Banco BPM and Banca Generali, with a combined value of approximately €34 billion.
The offer for Banco BPM is valued at approximately €25.3 billion, while the offer for Banca Generali is worth around €8.72 billion.
If both deals are completed, MPS aims to create a much larger and more diversified financial group, transforming what began as a defensive response to a takeover into a project to reshape the bank itself.
Why Is This About More Than Just Banks?
At first glance, this may look like another banking merger story.
But MPS’s strategy shows that the battle is much broader.
Through Banco BPM, the bank would significantly expand its presence in the Italian market. Through Banca Generali, it would gain a much stronger position in an area that is becoming increasingly important for banks: wealth management and financial advisory.
Banca Generali focuses on wealth management and services for high-net-worth clients. This is precisely why its inclusion gives the deal another strategic dimension.
MPS aims to increase the contribution of wealth management, advisory and asset management to the group’s revenues — activities that can generate significant income with relatively lower capital consumption compared with traditional banking.
So, the battle is not only about more branches, loans or deposits.
It is also about who will manage clients’ money and investments in the future.
Banca Generali Is a Key Piece of the Puzzle
One of the most strategic elements of the deal is precisely Banca Generali.
Generali controls approximately 50.1% of Banca Generali, making its position critical to the success of MPS’s offer.
By the end of August, Generali had not accepted the offer, but had stated that it was prepared to evaluate it, while also considering opportunities for broader industrial cooperation and the development of activities in strategic areas.
This is important because it shows that banking competition is becoming increasingly intertwined with insurance, investments and financial advisory.
Under this model, a customer is no longer simply someone who takes out a loan or holds a deposit.
A customer can simultaneously be a banking client, an investor, an insured individual and a user of wealth management services.
And this is precisely what makes customer wealth one of the most important areas of future competition.
A Game with Many Players
But MPS does not have an easy path ahead.
Banco BPM has a significant shareholder: Crédit Agricole, which owns nearly 30% of the bank. Its position could be decisive for the success of the offer.
At the same time, MPS’s ownership structure and the relationships between banks, insurers and major investors make this one of the most complex M&A battles in the Italian market.
If both offers were fully completed, MPS’s current shareholders would own approximately 50.1% of the new group, Banco BPM shareholders approximately 37.2%, and Banca Generali shareholders approximately 12.7%.
MPS also forecasts approximately €2.6 billion in annual pre-tax synergies from the transactions.
However, a major deal is not measured solely by its size.
It must integrate systems, people, technology, business models and different organizational cultures. This is precisely where one of the greatest risks of any consolidation process lies.
Who Will Come Out Stronger?
At this stage, it is still too early to identify a winner.
MPS is attempting to turn a defensive situation into an opportunity to transform itself into a much larger financial group.
Intesa Sanpaolo, on the other hand, is seeking to consolidate its position through MPS.
Meanwhile, Banco BPM and Banca Generali are at the center of a race in which their value is determined not only by banking assets, but also by customer networks, wealth management, financial advisory and the ability to generate new sources of revenue.
This is perhaps the most interesting part of the story.
The banking of the future is not being built solely on loans and deposits. It is being built on the ability to manage a much more complete financial relationship with the customer.
Source: Reuters • ANSA
FINARCH RECOMMENDS
The size of a bank is not the same as the value it creates for the customer.
Banking-sector consolidation may lead to larger institutions, more products and more advanced financial capabilities. But for customers, a larger bank does not automatically mean a better offer.
In a market where banks are expanding their activities beyond traditional lending, customers will face an increasing number of alternatives: loans, deposits, investments, insurance and wealth management services.
This makes comparing and fully understanding an offer even more important.
Do not focus only on the product being offered to you. Consider the cost, terms, flexibility, alternatives and how well the product fits your financial needs.
Our recommendation:
Do not choose only the bank. Choose the financial solution that best fits your needs. Compare, stay informed and make a clear decision.
In a rapidly changing financial market, information is an advantage.
This material is for informational purposes only and does not constitute individual investment advice.