By Valentina Za
MILAN, June 8 (Reuters) - Italy's biggest banking group Intesa Sanpaolo on Monday announced a €30.6 billion ($35 billion) unsolicited cash-and-share bid to buy rival lender Monte dei Paschi di Siena (MPS), kicking off a fresh consolidation drive.
Having secured a fifth of the Italian banking market with the acquisition of mid-sized UBI back in 2020, Intesa kept out of a mergers and acquisitions burst sweeping the industry last year, saying antitrust limits prevented any further domestic
expansion.
To address competition issues, Intesa said it had struck a deal with insurer Unipol, the main investor in BPER Banca, to sell a banking business comprising 635 MPS branches and the MPS brand, if its bid was successful.
Intesa and Unipol teamed up in a similar manner in the UBI deal.
Intesa said the combined entity would become the euro zone's second-biggest banking group by market value after Spain's Santander, with a 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.
MPS, which the state bailed out in 2017 and reprivatised in 2023-2024, emerged as a focal point for further Italian banking consolidation after buying Mediobanca last year.
That deal made it the largest investor in insurer Generali, a coveted asset in Italian finance.
Intesa, whose business model is focused on wealth management and insurance, had attempted to buy Generali in 2017, but dropped the plan and grew its insurance business internally.
Italy's second-biggest bank UniCredit last year built a large stake in Generali.
Intesa said in a statement its offer entailed a premium of 12.5% versus the closing share price of MPS on Friday, for an overall outlay of €30.6 billion versus the MPS market value of €27.4 billion.
On Sunday, amid mounting expectations of an Intesa move, Banco BPM said its board had unanimously approved seeking to open talks with MPS over a potential combination between the two lenders that would be a merger of equals.
($1 = 0.8667 euros)
(Reporting by Valentina Za in Milan and Gursimran Kaur in Bengaluru; Editing by Subhranshu Sahu, Tom Hogue and Jamie Freed)
