Historic Banking Move, MPS launches €13.3B bid for Mediobanca
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Monte dei Paschi di Siena has unveiled a €13.3 billion public exchange offer to acquire Mediobanca, aiming to create a new Italian banking giant. The deal would unite Mps's expertise in family and business credit with Mediobanca's strength in advisory and wealth management. Strategic players include the Caltagirone and Del Vecchio families, alongside government involvement due to its stake and golden power. The proposed merger promises synergies worth €700 million annually and accelerated tax benefits.
A groundbreaking development is shaking up the Italian banking sector: Monte dei Paschi di Siena (Mps) has announced a €13.3 billion public exchange offer to acquire Mediobanca. The world’s oldest bank is looking to secure a central position in Italian finance, including Mediobanca’s strategic 13% stake in Assicurazioni Generali.
Two influential Italian entrepreneurial families, Caltagirone and Del Vecchio (via Delfin), are expected to play a decisive role in the deal. Together, they hold a 27.6% stake in Mediobanca, 15% in Mps, and 16.9% in Generali. The Italian government is also set to be a key player, thanks to its 11% stake in Mps and its ability to exercise golden power to safeguard strategic national interests.
The Details of the Offer
Monte dei Paschi is offering Mediobanca shareholders 2.3 newly issued Mps shares for each Mediobanca share, which translates to a value of €15.992 per share, reflecting a 5.03% premium compared to the closing price on January 23, 2025. The goal of the merger is to create a powerful national banking champion that ranks third in key business segments. This would combine Mps’s expertise in lending to families and businesses with Mediobanca’s strong position in financial advisory and wealth management.
Statements from the CEO of Mps
Luigi Lovaglio, CEO of Monte dei Paschi, emphasized the transformative nature of this merger: “With this industrially-driven operation, we aim to take an innovative approach to consolidation in the banking sector. This initiative immediately creates value for both Mps and Mediobanca shareholders, and I believe, for the entire country,” he said. Lovaglio added that the new group will maintain and enhance the historic Mps and Mediobanca brands while integrating them under a unified structure.
Economic Implications
The merger is expected to leverage Mps’s deferred tax assets (DTA), converting them into tax credits by taking advantage of a larger consolidated tax base. Over six years, the new group is projected to utilize €2.9 billion worth of DTA. Additionally, the combined entity anticipates pre-tax synergies of approximately €700 million per year, broken down as follows: €300 million from increased revenue, €300 million from cost efficiencies, and €100 million from improved funding. However, the integration will require one-off expenses of around €600 million (pre-tax) during the first year.
Extraordinary Shareholder Meeting
To support the offer, Mps has scheduled an extraordinary shareholder meeting on April 17, where an increase in capital will be put to a vote. Lovaglio revealed that the idea for this operation has been under consideration since December 2022, shortly after Mps completed a €2.5 billion capital raise. “At that time, I presented three options to the Minister of Economy: continue independently, pursue a merger of equals, or consider a combination with Mediobanca. Now, the time has come to act,” he concluded.
A groundbreaking development is shaking up the Italian banking sector: Monte dei Paschi di Siena (Mps) has announced a €13.3 billion public exchange offer to acquire Mediobanca. The world’s oldest bank is looking to secure a central position in Italian finance, including Mediobanca’s strategic 13% stake in Assicurazioni Generali.
Two influential Italian entrepreneurial families, Caltagirone and Del Vecchio (via Delfin), are expected to play a decisive role in the deal. Together, they hold a 27.6% stake in Mediobanca, 15% in Mps, and 16.9% in Generali. The Italian government is also set to be a key player, thanks to its 11% stake in Mps and its ability to exercise golden power to safeguard strategic national interests.
The Details of the Offer
Monte dei Paschi is offering Mediobanca shareholders 2.3 newly issued Mps shares for each Mediobanca share, which translates to a value of €15.992 per share, reflecting a 5.03% premium compared to the closing price on January 23, 2025. The goal of the merger is to create a powerful national banking champion that ranks third in key business segments. This would combine Mps’s expertise in lending to families and businesses with Mediobanca’s strong position in financial advisory and wealth management.
Statements from the CEO of Mps
Luigi Lovaglio, CEO of Monte dei Paschi, emphasized the transformative nature of this merger: “With this industrially-driven operation, we aim to take an innovative approach to consolidation in the banking sector. This initiative immediately creates value for both Mps and Mediobanca shareholders, and I believe, for the entire country,” he said. Lovaglio added that the new group will maintain and enhance the historic Mps and Mediobanca brands while integrating them under a unified structure.
Economic Implications
The merger is expected to leverage Mps’s deferred tax assets (DTA), converting them into tax credits by taking advantage of a larger consolidated tax base. Over six years, the new group is projected to utilize €2.9 billion worth of DTA. Additionally, the combined entity anticipates pre-tax synergies of approximately €700 million per year, broken down as follows: €300 million from increased revenue, €300 million from cost efficiencies, and €100 million from improved funding. However, the integration will require one-off expenses of around €600 million (pre-tax) during the first year.
Extraordinary Shareholder Meeting
To support the offer, Mps has scheduled an extraordinary shareholder meeting on April 17, where an increase in capital will be put to a vote. Lovaglio revealed that the idea for this operation has been under consideration since December 2022, shortly after Mps completed a €2.5 billion capital raise. “At that time, I presented three options to the Minister of Economy: continue independently, pursue a merger of equals, or consider a combination with Mediobanca. Now, the time has come to act,” he concluded.