Crédit Agricole Proposes Banco BPM Merger to Create Italy’s Third-Largest Bank

France’s biggest bank by customers has made its boldest move yet in Italy. On Monday, 9 November 2026, Crédit Agricole proposed merging its Italian business with Banco BPM, a deal that would create Italy’s third-largest banking group and reshape a banking market that has been in the middle of a takeover frenzy for two years.

The French bank called the proposal “friendly” and said it had already submitted it to Banco BPM’s board for evaluation. If the deal goes ahead, the combined bank would serve 6.5 million customers through more than 2,300 branches, and it would stay listed on the Milan stock exchange.

This is not a done deal. It is the start of a negotiation, and several big hurdles stand in the way. But the stock market’s first reaction was clear: Banco BPM shares jumped more than 10 percent on the news, while Crédit Agricole’s own shares barely moved.

Here is what the deal involves, why it matters, and what happens next.

What Crédit Agricole has proposed

Crédit Agricole wants to combine Banco BPM with Crédit Agricole Italia, its Italian banking and insurance business. The new group would be built around Banco BPM and would remain listed in Milan.

The key numbers in the proposal are:

• A 20 percent premium for Banco BPM. The exchange ratio in the deal values Banco BPM about 20 percent above its recent market value.
• A €1 billion special dividend. Banco BPM’s current shareholders would receive an extraordinary dividend of €1 billion (about $1.1 billion) as part of the deal.
• A bigger stake for Crédit Agricole. The French bank already owns 29.6 percent of Banco BPM, making it the Italian bank’s biggest shareholder. Under the proposal, its stake in the combined group would rise to about 45 percent.
• €800 million in yearly benefits. Crédit Agricole expects the combined bank to generate around €800 million a year in extra revenue and cost savings, although it did not explain in detail where those savings would come from.
• Higher earnings for Banco BPM shareholders. The bank said the deal would lift Banco BPM’s earnings per share by about 24 percent in 2027, thanks to the premium offered and the expected savings.

Banco BPM’s chief executive, Giuseppe Castagna, would lead the merged group if the deal goes through.

Crédit Agricole said the transaction could be completed in the second half of 2027. That date depends on winning shareholder approval and clearing a series of regulatory checks first.

Why investors liked the news

The market’s verdict arrived within hours. Banco BPM shares were up more than 10 percent by late morning on Monday, 9 November, while Crédit Agricole shares were roughly flat, down about 0.6 percent around midday.

That gap tells a simple story: investors think the deal is a much better one for Banco BPM’s shareholders than for Crédit Agricole’s. JPMorgan said much the same in a note to clients, saying the transaction appeared more attractive for shareholders of the Italian bank than for those of the French one.

The reason is the premium. Banco BPM shareholders are being offered a price well above the market value, plus a €1 billion cash dividend on top. For Crédit Agricole, the reward is longer term: a much bigger business in Italy, one of Europe’s largest banking markets, and the chance to earn more from a country where it has been steadily expanding for years.

There is another way to look at the price. According to Reuters, the terms effectively value the Italian business Crédit Agricole is contributing at a discount. That means Banco BPM shareholders would end up with a larger share of the combined group than they would get in a merger based on an equal valuation of both sides. In plain terms, Crédit Agricole is paying up to get the deal done.

Why Italy’s banks are merging

To understand this deal, you need to know what has been happening in Italian banking. For the past two years, Italy’s lenders have been rushing to combine, buy rivals, and get bigger. The reasons are simple: bigger banks can cut costs, invest in technology, and compete better with rivals in France, Germany, and Spain.

Rome has also wanted a strong third Italian banking group for years. At the moment, two giants dominate the market: Intesa Sanpaolo and UniCredit. The Italian government has long favoured the emergence of a third domestic bank big enough to challenge them, and it has seen Monte dei Paschi di Siena, the world’s oldest bank, as a key piece in that plan.

Banco BPM has been at the centre of this story before. In November 2024, UniCredit, Italy’s second-largest bank, launched a takeover bid for Banco BPM, originally valued at about €10.1 billion. The bid turned into a long and bitter fight. Banco BPM’s board rejected it, the Italian government imposed strict conditions on the deal under its “golden power” rules, and UniCredit finally withdrew its offer on 22 July 2025.

Those government conditions were demanding. They included an order for UniCredit to stop all its business in Russia and to keep its lending levels in Italy unchanged for a set period. UniCredit said the conditions made it impossible to talk to Banco BPM shareholders in a normal way, and it walked away, calling the deal a missed opportunity.

Crédit Agricole played a major role in blocking that takeover. In April 2025, it raised its stake in Banco BPM to 19.9 percent and refused to sell its shares to UniCredit. It has since increased its holding to 29.6 percent, becoming Banco BPM’s largest shareholder.

In September 2026, Reuters reported that Crédit Agricole and UniCredit had even held talks about a possible joint takeover of Banco BPM. Now, just two months later, Crédit Agricole has moved on its own with a friendly merger proposal instead.

Why Crédit Agricole wants a bigger Italy

Crédit Agricole is France’s largest bank by customers, but its home market is mature, meaning there is limited room left to grow there. Italy, by contrast, still offers room to expand, and the French bank has been building its presence there for years.

Its Italian business already includes retail banking, insurance, and asset management. By folding those operations into Banco BPM, Crédit Agricole would gain a much larger branch network and millions more customers, without having to build them from scratch.

The deal also fits a wider trend across Europe. Banks in France, Spain, and Italy have all been merging to gain scale as they face higher technology costs, tougher competition from American banks, and new rivals in digital payments. A bigger bank can spread those costs over more customers and invest more in online and mobile banking.

For Italy, the deal would also create the third large banking group the government has wanted, although this one would be part-owned by a French bank rather than fully Italian. That detail matters, because Rome has shown in the past that it cares about who controls its banks.

The hurdles the deal still has to clear

A proposal is not a merger. Before this deal can happen, it must pass several tests, and any one of them could slow it down or stop it.

The “whitewash” vote

The first test is with Banco BPM’s own shareholders. Under Italian takeover rules, a shareholder that raises its stake above 30 percent normally has to make a full takeover offer for all the remaining shares. Crédit Agricole wants to avoid that, so it needs approval under a procedure known as the “whitewash.”

In simple terms, the whitewash means that a majority of the other Banco BPM shareholders present at a special meeting must not vote against the deal. If they agree, Crédit Agricole can raise its stake to about 45 percent without being forced to buy out everyone else. The merger itself would also need approval from at least two-thirds of the capital represented at that meeting.

The government’s “golden power”

The second test is political. Italy’s “golden power” rules let the government step in, set conditions, or block deals it sees as important to national security or the national interest. Banking is one of the sectors covered by these rules.

The same rules helped kill UniCredit’s bid for Banco BPM last year, and the European Commission warned Italy at the time that its use of them might break European Union law. Crédit Agricole will be hoping for a smoother ride, helped by the fact that it briefed the Italian government before announcing the deal. Three people familiar with the matter told Reuters that the French bank had spoken to Rome in advance, and that it went public after media reports and questions from investors made it hard to keep the project secret.

A spokesperson for Italy’s Treasury declined to comment on whether Rome was still taking a neutral stance on the wave of banking mergers. Banco BPM itself declined to comment on the proposal.

The regulators

The third test is regulatory. The deal would need authorisation from the European Central Bank, which supervises the eurozone’s biggest banks, as well as approval from banking and competition authorities. Those checks can take many months, which is one reason Crédit Agricole is only aiming to complete the deal in the second half of 2027.

What it means for customers and shareholders

For Banco BPM’s shareholders, the proposal looks generous on paper: a 20 percent premium, a €1 billion dividend, and a projected 24 percent rise in earnings per share in 2027. That explains the jump in the share price.

For Crédit Agricole’s shareholders, the picture is less clear. The French bank is offering generous terms to win Banco BPM over, and investors will want to see proof that the promised €800 million a year in savings is real before they get excited.

For customers, little would change in the short term. The two banks would keep operating as normal while the deal is discussed and reviewed. Over time, a combined bank could mean more branches in some areas and fewer in others, as the two networks are merged. It could also mean more investment in digital banking, since a bigger bank can afford to spend more on technology.

For the Italian banking market, the deal would be another step towards a smaller number of bigger banks. That is the direction the whole sector has been moving in, and this proposal suggests the consolidation wave is not over yet.

What happens next

The next step belongs to Banco BPM’s board, which must now study the proposal and decide whether to recommend it to shareholders. There is no deadline for that decision, and the board could ask for better terms, reject the offer, or open talks.

If the board supports the deal, the focus will shift to the shareholder vote and the government’s golden power review. Both will be watched closely, because they decided the fate of the last big attempt to take over Banco BPM.

For now, the key point is simple: Italy’s banking shake-up has a new chapter, and this time the bidder is the French bank that helped stop the last takeover. Whether it succeeds where UniCredit failed will depend on shareholders, regulators, and the government in Rome.

Frequently asked questions

What has Crédit Agricole proposed?

Crédit Agricole has proposed merging its Italian business, Crédit Agricole Italia, with Banco BPM. The combined bank would be built around Banco BPM, stay listed in Milan, and become Italy’s third-largest banking group, serving 6.5 million customers through more than 2,300 branches.

How much is Crédit Agricole offering Banco BPM shareholders?

The proposal includes an exchange ratio reflecting a 20 percent valuation premium for Banco BPM, plus an extraordinary dividend of €1 billion (about $1.1 billion) for Banco BPM’s current shareholders.

How big would Crédit Agricole’s stake become?

Crédit Agricole already owns 29.6 percent of Banco BPM. Under the proposal, its stake in the combined group would rise to about 45 percent.

Who would run the merged bank?

Banco BPM’s chief executive, Giuseppe Castagna, would lead the combined group, according to Crédit Agricole.

When could the deal be completed?

Crédit Agricole said the transaction could be completed in the second half of 2027, subject to shareholder approval, European Central Bank authorisation, and clearance under Italy’s golden power rules.

Why did UniCredit’s earlier bid for Banco BPM fail?

UniCredit launched a takeover bid in November 2024 but withdrew it on 22 July 2025, blaming conditions imposed by the Italian government under its golden power rules, including an order to exit its business in Russia. Crédit Agricole, which had raised its stake to 19.9 percent, also refused to sell its shares to UniCredit.

Is the merger a done deal?

No. This is a friendly proposal submitted to Banco BPM’s board for evaluation. It still needs board support, shareholder approval, and regulatory clearance before it can go ahead.

Conclusion

Crédit Agricole’s proposal to merge its Italian business with Banco BPM is the latest twist in Italy’s two-year banking consolidation story. The offer is generous: a 20 percent premium, a €1 billion dividend, and a leading role for Banco BPM’s chief executive. The market’s reaction, a jump of more than 10 percent in Banco BPM shares, shows that investors see real value in it.

But the deal is far from done. It must win over Banco BPM’s board and shareholders, pass the government’s golden power review, and clear the European Central Bank. The last attempt to take over Banco BPM failed on exactly those hurdles.

What is certain is that Italy’s banks are still consolidating, and the French bank that helped block the last takeover is now trying to build Italy’s third banking giant itself. The next few months will show whether shareholders and Rome agree.

Sources

• Reuters (via London South East), “Credit Agricole pitches Banco BPM tie-up in Italy banking shake-up”, 9 November 2026: https://www.lse.co.uk/news/credit-agricole-pitches-banco-bpm-tie-up-in-italy-banking-shake-up-c7p6qu11nbhn2rp.html
• Crédit Agricole S.A. press release, “Crédit Agricole proposes to Banco BPM to create together a new leading Italian bank”, 9 November 2026: https://www.tradingview.com/news/globenewswire:df0b58461094b:0-credit-agricole-sa-cr-dit-agricole-proposes-to-banco-bpm-to-create-together-a-new-leading-italian-bank/
• Morningstar / Dow Jones Newswires, “Credit Agricole Proposes Merger of Italian Business With Banco BPM”, 9 November 2026: https://www.morningstar.com/news/dow-jones/202611092995/credit-agricole-proposes-merger-of-italian-business-with-banco-bpm-2nd-update
• Reuters, “Italy reaps awkward payoff for bank meddling”, 9 November 2026: https://www.reuters.com/commentary/breakingviews/italy-reaps-awkward-payoff-bank-meddling-2026-11-09/
• Free Malaysia Today, “UniCredit boosts outlook after ending bid for Banco BPM”, 23 July 2025: https://www.freemalaysiatoday.com/category/business/2025/07/23/unicredit-boosts-outlook-after-ending-bid-for-banco-bpm
• Financial Technology (FStech), “Crédit Agricole and UniCredit ‘eyeing joint takeover of Banco BPM’”, 25 September 2026: https://www.fstech.co.uk/fst/Credit_Agricole_And_UniCredit_Eyeing_Joint_Takeover_Of_Banco_BPM.php

This article is for general information and education only. It is not legal or financial advice.