Credit Agricole Proposes Banco BPM Merger to Create Italy's Third-Largest Bank

Credit Agricole said on Monday, November 9, 2026, that it has proposed to Banco BPM that the two banks open discussions on a merger between Banco BPM and Credit Agricole Italia. The proposal has been submitted to the Banco BPM board for evaluation. No agreement has been reached, and the deal is a proposal, not a completed merger.

The combined bank would be built around Banco BPM and would remain listed in Milan. It would become Italy's third-largest banking group.

What the combined bank would look like

The merged group would serve 6.5 million customers through more than 2,300 branches, according to the Credit Agricole proposal. Credit Agricole would increase its holding from its current 29.6 percent stake in Banco BPM to approximately 45 percent of the combined entity.

Banco BPM chief executive Giuseppe Castagna would lead the merged group. Credit Agricole puts the annual synergies from the combination at around 800 million euros, and the proposal is expected to help lift Banco BPM earnings per share by about 24 percent in 2027.

The terms offered to Banco BPM shareholders

For Banco BPM shareholders, the proposal provides an exchange ratio reflecting a 20 percent premium. It also includes an extraordinary dividend of 1 billion euros to current Banco BPM shareholders. Banco BPM shares had closed at 13.45 euros on Friday.

Markets reacted quickly on Monday. Banco BPM shares jumped 9.4 percent after the proposal, while Credit Agricole shares dropped 1.4 percent. The pan-European STOXX 600 index was flat at 648.88 points by 0810 GMT.

Approvals still ahead

The proposed transaction is conditional on approval by an extraordinary general meeting of Banco BPM under the whitewash procedure. It also needs customary approvals, including European Central Bank authorization and clearance under Italy's golden power regime, which lets the Italian government review deals in strategic sectors.

Credit Agricole says the proposed transaction could be completed in the second half of 2027. Until the Banco BPM board responds and the approvals are in place, the merger remains a proposal under discussion, and the two banks continue to operate separately.

What is at stake

The proposal would redraw the top of Italian banking. A combined group with 6.5 million customers and more than 2,300 branches would rank third in the country, and it would do so under Banco BPM's name and Milan listing, led by Banco BPM's own chief executive. Credit Agricole would hold approximately 45 percent of that group, up from the 29.6 percent it holds in Banco BPM today, while Banco BPM shareholders would receive a 20 percent premium in the exchange ratio and share a 1 billion euro extraordinary dividend. The first answer now rests with the Banco BPM board, which has the proposal in front of it for evaluation.