Intesa Sanpaolo has launched a voluntary public exchange and purchase offer for all ordinary shares of Banca MPS, the world's oldest bank, offering 16 new Intesa shares for every 10 MPS shares tendered, alongside a cash payment of €1 per MPS share.

The offer values MPS at a 12.5% premium to last Friday's closing price. "Paid almost entirely in cash, this premium represents approximately €3bn in absolute value, for a total valuation of MPS of €30.5bn," Jefferies noted.

A "strategic milestone" for Intesa

Intesa is presenting the transaction as a strategic milestone aimed at strengthening its position as a European leader in wealth management, protection, and advisory services, while ensuring sustainable value creation for its stakeholders.

"The Italian bank anticipates an 8% accretive effect on EPS and dividends per share, driven by €2.9bn in cost synergies and €1.4bn in revenue synergies, representing approximately 4% of the combined revenue base," Jefferies observed.

The broker also highlighted that Intesa plans EUR 61bn in distributions between 2025 and 2029, with an additional €2.7bn in 2027 and a 95% payout ratio, as well as a CET1 ratio exceeding 14% in 2029, compared to its own target of 13.2%.

A partnership with Unipol

To meet antitrust requirements, Intesa Sanpaolo has entered into a binding agreement with Unipol Assicurazioni for the disposal of a banking entity comprising the MPS brand, approximately 635 branches, and the essential central functions required for autonomous banking operations, for €3 bn to €3.5bn.

"Unipol plans to propose a merger between the acquired entity and BPER Banca, structured in such a way that it will allow Unipol to obtain de facto control over the lender," Jefferies pointed out, specifying that the insurer expects €800m in synergies from such a potential transaction.

For its part, Intesa would retain approximately 80% of the acquired perimeter, notably Mediobanca, nearly 625 branches, and activities representing about 80% of the combined net income of MPS and Mediobanca in 2025. The completion of the transaction is expected by December 2026, subject to regulatory approvals and other conditions.

This move comes amid a wave of consolidation within the Italian banking sector. Earlier over the weekend, Banco BPM had urged Banca MPS to discuss a possible "merger of equals," which would create a runner-up to Intesa and overtake UniCredit. MPS had completed the acquisition of Mediobanca last September.