Unique-Italy informally backed Credit score Agricole’s increased BPM stake, sources say

By Giuseppe Fonte and Valentina Za

ROME (Reuters) – France’s Credit score Agricole (OTC:CRARY) had casual backing from the Italian authorities earlier than it mentioned on Friday it was elevating its stake in Banco BPM, two sources near the matter advised Reuters.

The rise intensifies a banking battle in Italy, begun when UniCredit final month made a takeover provide for Banco BPM, scuppering the federal government’s plan to assist convey a couple of merger between BPM and state-backed Monte dei Paschi di Siena.

Credit score Agricole declined to remark.

Ruling out a full takeover bid, Credit score Agricole mentioned on Friday it had entered spinoff contracts to boost its holding in BPM to fifteen.1% from 9.9%. It’s looking for European Central Financial institution approval to purchase as much as 19.99%.

Asking to not be named because of the sensitivity of the matter, the sources mentioned that, earlier than appearing, the French financial institution had knowledgeable and obtained an off-the-cuff nod from Italian Prime Minister Giorgia Meloni’s authorities.

Individually, a supply accustomed to Credit score Agricole’s technique advised Reuters the financial institution goals to strengthen its negotiating place to guard business agreements that generate revenues in its greatest market exterior France.

Credit score Agricole turned Banco BPM’s foremost investor in 2022, shortly after an earlier aborted takeover try of BPM by UniCredit.

Credit score Agricole companions with BPM in shopper credit score and insurance coverage. Its asset administration arm Amundi has a distribution contract with UniCredit that runs out in 2027.

Current in Italy since 1972, Credit score Agricole has grown steadily within the nation, partly by means of small acquisitions. Officers in Rome have beforehand advised Reuters it has all the time reassured the federal government about its technique, ruling out any overly aggressive transfer to grab market share.

The technique has not modified, one of many sources mentioned.

Approval from the Italian authorities, in addition to the European Central Financial institution, is important if Credit score Agricole is to boost its stake in BPM.

The Italian authorities has “golden powers” that enable it to dam or set circumstances on international and home company takeovers in strategic sectors comparable to vitality, telecoms and banking.

Below Italian guidelines, the cupboard workplace should approve share possession in any Milan-listed strategic firm when it crosses thresholds set at 3%, 5%, 10%, 15% and different intervals as much as 50%.

UniCredit CEO Andrea Orcel has mentioned his financial institution couldn’t afford to be sidelined as Italian banking consolidation sped up. Banco BPM had moved to purchase fund supervisor Anima Holding and take a stake in Monte dei Paschi days earlier than UniCredit launched its bid with a close to zero premium.

($1 = 0.9463 euros)