By Giuseppe Fonte and Valentina Za
ROME (Reuters) – France’s Credit Agricole (OTC:) received informal support from the Italian government before saying on Friday it would increase its stake in Banco BPM, two sources close to the matter told Reuters.
The surge intensifies the battle between Italy’s banks, which began when UniCredit made a takeover bid for Banco BPM last month, disrupting the government’s plan to complete a merger between BPM and state-backed Monte dei Paschi di Siena to bring was thwarted.
Credit Agricole declined to comment.
Credit Agricole ruled out a full takeover bid and said on Friday it had entered into derivative contracts to increase its stake in BPM from 9.9% to 15.1%. It is seeking approval from the European Central Bank to buy up to 19.99%.
The sources asked not to be named due to the sensitivity of the matter and said that before acting, the French bank had informed the government of Italian Prime Minister Giorgia Meloni and received an informal nod.
In addition, a source familiar with Credit Agricole’s strategy told Reuters that the bank wants to strengthen its negotiating position to protect commercial deals that generate revenue in the largest market outside France.
Credit Agricole became the main investor of Banco BPM in 2022, shortly after an earlier aborted takeover attempt of BPM by UniCredit.
Credit Agricole collaborates with BPM in the field of consumer credit and insurance. The asset management arm Amundi has a distribution contract with UniCredit that expires in 2027.
Credit Agricole has been present in Italy since 1972 and has grown steadily in the country, partly through small acquisitions. Officials in Rome previously told Reuters that it has always reassured the government about its strategy, ruling out any overly aggressive attempt to grab market share.
The strategy has not changed, one of the sources said.
Approval from the Italian government and the European Central Bank is needed if Credit Agricole wants to increase its stake in BPM.
The Italian government has ‘golden powers’ that allow it to block or impose conditions on foreign and domestic takeovers in strategic sectors such as energy, telecoms and banking.
Under Italian rules, the Cabinet must approve the shareholding of any strategic company listed in Milan when it exceeds the thresholds set at 3%, 5%, 10%, 15% and other intervals up to 50%.
UniCredit CEO Andrea Orcel has said his bank cannot afford to be sidelined as Italian bank consolidation accelerates. Banco BPM had taken over fund manager Anima Holding and taken a stake in Monte dei Paschi, a few days before UniCredit made its offer with a premium of almost zero.
($1 = 0.9463 euros)
