Intesa launches $35 billion Monte dei Paschi bid to redraw Italy's financial map

MILAN - Italy's top banking group Intesa Sanpaolo made a €30.6 billion ($35 billion) unsolicited cash-and-share bid on Monday to buy smaller rival Monte dei Paschi di Siena (MPS) to create the euro zone's second-largest lender by market value.

A successful transaction would narrow Intesa's capitalisation gap with Spain's Santander, and help it overtake France's BNP Paribas and domestic rival UniCredit - which would extend its lead if it managed to complete a hostile takeover of Commerzbank.

In Italy, the deal would be behind only the Intesa–Sanpaolo IMI merger two decades ago in terms of size. However, when looking at assets, Intesa would still have only a fraction of those of Santander or BNP.

The Italian government, which has taken an active stance on other financial sector deals over the past year, will take a neutral view of this bid, sources told Reuters.

Intesa CEO Carlo Messina said he had sounded out the government, without disclosing details of the deal, to make sure it would not be opposed.

MPS said it would examine both Intesa's "non-agreed" bid and "unsolicited" merger interest expressed by Banco BPM on Sunday.

MPS, the world's oldest bank which Italy bailed out in 2017 and reprivatised in 2023-24, said it was working with BofA and UBS as advisers.

INTESA VOICES CONFIDENCE

Messina said the offer, although not previously agreed, was friendly towards MPS investors and he was confident of securing their support by the time the bid concludes in December.

He told an analysts' call he was on good terms with the two principal investors - Delfin, a holding company, and billionaire businessman Francesco Gaetano Caltagirone - and was paying a €3 billion cash component precisely to win them over.

By offering 1.6 Intesa shares plus €1 for every MPS share tendered, the bid pays a premium of 12.5% to MPS' closing share price on Friday.

Shares in MPS jumped 13% on Monday while those in Intesa slipped 1.4%.

BPM'S PROPOSAL JUST 'A LOVE LETTER'

MPS has been a focus of merger activity in Italian banking since it acquired Mediobanca and in the process became the main investor in insurer Generali, a coveted asset in Italian finance.

MPS said late on Monday that the Mediobanca merger was progressing as scheduled.

Intesa's move potentially sidelines Banco BPM, which has long been the leading candidate to merge with MPS. Messina quipped that BPM's Sunday approach to MPS was just a "love letter", as opposed to his concrete offer.

Under Italian takeover rules, Intesa's formal bid now prevents MPS from agreeing a deal with BPM without prior shareholder approval.

UNIPOL DEAL

Intesa secured a fifth of the Italian banking market when it bought midsized UBI back in 2020, leapfrogging UniCredit to become Italy's largest bank by assets.

Citing antitrust limits, Intesa has kept out of a wave of mergers and acquisitions in Italy's banking sector that began in November 2024, with Messina previously describing it as "the Wild West."

To address competition issues, Intesa said on Monday it had struck a deal with insurer Unipol to sell a banking business comprising 635 MPS branches - roughly half the total - and MPS' central offices in Siena, if its bid is successful.

Unipol is the main investor in smaller bank BPER Banca and an Intesa ally. It had played a similar role in the UBI deal, buying branches to help Intesa gain antitrust approval while supporting BPER's expansion.

Unipol said it would pay up to €3.5 billion for the MPS deal and combine it with BPER to create a bank that would operate under the name Banca Monte dei Paschi.

Unipol is advised by Rothschild, Intesa by JPMorgan.

GENERALI STAKES

Intesa said the combined entity would have a market capitalisation of €126 billion and a net income goal of €16 billion in 2029, up from last year's combined profits of €13.6 billion.

Messina said Intesa wanted to keep the 13% Generali stake which MPS acquired through Mediobanca, but ruled out a takeover of the insurer because of major antitrust problems.

Intesa had attempted to buy Generali in 2017, but dropped the plan and grew its insurance business internally. UniCredit meanwhile has built a large Generali stake.

Messina said a 3% Generali stake Intesa unveiled on Monday was necessary to defuse any defensive move from the insurer, which in 2017 took a stake in Intesa to thwart its approach thanks to Italian rules on cross-shareholdings.

Intesa plans to retain Mediobanca, strengthening its wealth management and corporate investment banking activities.

($1 = 0.8667 euros)

(Reporting by Valentina Za in Milan and Gursimran Kaur in Bengaluru; Editing by Jamie Freed, Susan Fenton, Keith Weir and Daniel Wallis)

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This story was originally published June 8, 2026 at 6:38 PM.