Italy's BPM invites MPS to $58 billion merger talks as Intesa, BPER weigh move

By Valentina Za, Giuseppe Fonte and Andrea Mandala

MILAN, June 7 (Reuters) - Italy's Banco BPM said on Sunday it would invite Banca Monte dei Paschi di Siena to discuss a potential tie-up, with sources saying MPS had also attracted interest from Intesa Sanpaolo and BPER Banca.

MPS, which the state bailed out in 2017 and reprivatised in 2023-24, has emerged as a focal point for further Italian banking consolidation after buying Mediobanca in a first merger wave last year. The deal made it the largest investor in insurer Generali.

"All roads lead to Siena," MPS CEO Luigi Lovaglio told a recent event, referring to the bank's Tuscan base.

As BPM said it would propose a long-mooted tie-up, four people familiar with the matter said Intesa and BPER were weighing a potential bid.

One source said Intesa's board met on Sunday to discuss the issue. Intesa declined to comment, while BPER was not immediately available.

Intesa faces antitrust constraints in Italy after its 2020 acquisition of UBI, which stripped UniCredit of the title of Italy's biggest bank. Two sources said Intesa is interested only in parts of MPS, implying a break-up.

BPM, which is working with Citi and Goldman Sachs, said its proposal would safeguard both banks.

The combined group would have a market value of about €50 billion ($58 billion). BPM estimated earnings per share would rise by more than 10%, driven by annual pre-tax benefits exceeding €1.1 billion.

BPM said its board, which includes representatives of France's Credit Agricole, its main shareholder, had unanimously approved a move to express interest to MPS in discussing a "merger of equals".

The bank gave no further details on deal structure.

MPS said it would not comment on BPM's announcement until its board had discussed it.

The bank has a board meeting scheduled on Monday, giving it a first opportunity to discuss the matter, according to a person close to the matter.

Banco BPM became an investor in MPS in November 2024, when the Italian government completed the reprivatisation of the bank and brought in domestic investors as core shareholders.

Prospects of a BPM-MPS tie-up back then prompted UniCredit to launch a takeover offer for Banco BPM. The bid ultimately failed in July 2025 but prevented the target from pursuing alternative M&A moves.

After losing its top spot to Intesa following the UBI deal, UniCredit appointed dealmaker Andrea Orcel as CEO in 2021 with a mandate to pursue acquisitions. Orcel, now focused on a takeover of Commerzbank, has said UniCredit could "voluntarily miss out" on Italian consolidation if no deal meets its terms.

($1 = 0.8681 euros)

(Additional reporting by Angelo Amante. Editing by Kirsten Donovan and Mark Potter)