Crédit Agricole Proposes Merger of Banco BPM With Its Italian Unit, Crédit Agricole Italia

Crédit Agricole S.A. said it has proposed discussions with Banco BPM S.p.A. on a potential merger between the Italian lender and Crédit Agricole's own Italian subsidiary, Crédit Agricole Italia, according to a statement from Crédit Agricole. The French bank described the combination as a friendly proposal that has been submitted for evaluation by Banco BPM's Board of Directors, with the resulting entity built around Banco BPM and remaining listed in Milan.

The Proposal

Crédit Agricole's statement frames the deal as "a natural extension of the long-term partnership between Banco BPM and Crédit Agricole and the mutual understanding developed between the two groups," per the company's release. As of the time of reporting, Banco BPM had not issued a public response. Morningstar/Dow Jones reported that "Banco BPM didn't immediately respond to a request for comment," indicating no formal board decision had been disclosed as of publication.

Crédit Agricole Italia itself has operated in Italy for more than half a century. Per Crédit Agricole, the unit employs 12,400 people across a network of 1,000 branches serving 2.9 million customers. Crédit Agricole and Morningstar/Dow Jones both described the combined group as Italy's third-largest banking group, serving 6.5 million customers through more than 2,300 branches.

Deal Terms and Valuation

According to Crédit Agricole's own deal documentation, the proposed exchange ratio "reflects a 20% premium in valuing Banco BPM relative to the 2027E P/E multiple used to value Crédit Agricole's contributed businesses." RTTNews reported the same 20% premium alongside an extraordinary dividend of 1 billion euros payable to Banco BPM's current shareholders, a figure Crédit Agricole's release also confirms.

Crédit Agricole put expected pre-tax synergies at 800 million euros per year, according to its own filing. The company also estimated the transaction would lift Banco BPM's 2027 earnings per share by approximately 24%, attributing the gain to the combination of the premium offered and the scale of projected synergies, a figure echoed by RTTNews.

Through its contributed businesses, Crédit Agricole said it would move from its current 29.6% stake in Banco BPM to approximately 45% of the combined entity. Interpretation, based on those disclosed figures: the two percentages are measured against different bases — the existing Banco BPM share register versus the enlarged post-merger company — so they are not strictly comparable, but the gap (45% minus 29.6%, or 15.4 percentage points) indicates a materially larger shareholding for Crédit Agricole while still sitting below a 50% majority.

Under the terms Crédit Agricole disclosed, the combined entity's board would continue to consist of a majority of independent members, and Banco BPM's current chief executive would be confirmed as CEO of the merged group, a governance structure both Crédit Agricole and RTTNews confirmed in their reporting.

Regulatory and Shareholder Hurdles

The transaction is far from a done deal procedurally. Per Crédit Agricole's own disclosure, completion would be conditional on approval by Banco BPM's extraordinary general meeting under the so-called "whitewash" procedure, which requires a majority of at least two-thirds of capital represented at the meeting. That mechanism would exempt Crédit Agricole from launching a mandatory tender offer for the remaining shares it does not already own.

Crédit Agricole's disclosure further specifies that the tender-offer exemption is contingent on there being no dissenting vote by the majority of shareholders present, other than Crédit Agricole and any shareholder or shareholders holding, alone or jointly, a majority — including a relative majority — exceeding 10%. Beyond shareholder approval, the deal would need customary regulatory clearances, including authorization from the European Central Bank and approval under Italy's "golden power" regime, which allows the Italian government to review and potentially restrict transactions in sectors deemed strategic.

Crédit Agricole said the transaction proposed to Banco BPM could be completed in the second half of 2027, a timeline RTTNews also reported. That multi-year horizon reflects the layered approval process the deal would need to clear, spanning shareholder votes, the ECB, and Italian government review, any one of which could alter or delay the structure disclosed so far.

Market Reaction

Banco BPM shares closed at 13.45 euros on the Friday before the announcement, according to Morningstar/Dow Jones. In Paris, Crédit Agricole shares were down more than 1% at 15.61 euros on the Monday the proposal was announced, per RTTNews. Neither report attributed the share-price move to a specific cause.

Bottom Line

Crédit Agricole has put a detailed, friendly proposal on the table that would combine its long-established Italian subsidiary with Banco BPM, creating what Crédit Agricole describes — and Morningstar/Dow Jones reported — as Italy's third-largest banking group. The numbers disclosed, a 20% exchange-ratio premium, a 1 billion euro extraordinary dividend, 800 million euros in annual pre-tax synergies, and an estimated 24% increase in Banco BPM's 2027 earnings per share, come from Crédit Agricole's own announcement and filing. What remains unresolved is Banco BPM's formal response, which had not been issued as of this reporting, and whether the deal can clear the two-thirds shareholder threshold, ECB review, and Italy's golden power screening before the targeted second-half 2027 completion.