MPS, OPS on Mediobanca to create a third banking hub

New twist for Italian banking riskwith a potential operation between two of the oldest and best-known brands in the sector. Banca Monte dei Paschi di Siena has decided to launch aVoluntary Public Exchange Offer (OPS) on all shares Mediobanca ordinary shares. The exchange ratio was set at 2,300 newly issued MPS shares for each existing Mediobanca share, which entails an implicit offer price of 15,992 euros per share, and a premium of 5.03% compared to the official prices of the January 23, 2025, for a equivalent value of 13.3 billion euros.

The objective of the offer is to acquire the entire share capital and achieve the delisting of Mediobanca shares on Euronext Milan. The execution of the Public Exchange Offer is expected to be completed by the third quarter of 2025.

An agreement for Mediobanca represents the last step of consolidation in the Italian financial sector. BPM desk launched a takeover bid for asset manager Anima in November, while UniCredit announced operations on both Banco BPM and the German Commerzbank.

The goal

The aggregation with Mediobanca will create a new national champion which will position itself among the top three institutions in terms of total assets, customer loans, direct funding and total financial assets.

The operation will give rise to: a primary player of Wealth Managementthanks to the combination of the capabilities of Mediobanca and MPS in private banking and of Banca Widiba and Mediobanca Premier in asset gathering, also thanks to approximately 1,200 promoters in aggregate; a strong CIB player in all products (eg, consultancy, capital markets, corporate lending), with position of leadership in the Equity Capital Markets and M&A market and a strong complementarity of the customer base (SMEs and enterprises), with a growth opportunity in the developing market segment of medium-sized enterprises; the leader in the consumer financing sector through Compass, already a partner chosen by MPS; and an operator who benefits from sustainable cash flow, resulting from the insurance investment.

The synergies

The transaction will allow you to benefit from the value of MPS’s DTAs, leveraging a higher consolidated tax base. The new Group will, in fact, be able to accelerate the use of 2.9 billion DTAs over the next six years, with 0.5 billion per year and a significant capital benefit. Furthermore, the new group will benefit from fully operational pre-tax synergies of approximately 700 million per yearof which approximately 300 million represented by revenue synergies, approximately 300 million by cost synergies and approximately 100 million by funding synergies.

As part of the operation, the group plans integration costs of approximately 600 million before taxes, to be paid in the first year of activity. MPS expects to maintain a strong capital base (Common Equity Tier 1 pro forma ratio of approximately 16%) upon completion of the transaction, supported by increased organic capital generation.

The benefits

They are expected significant benefits for the shareholders of both banks with the distribution of a sustainable and growing dividend per share over the period: double-digit increase in adjusted Earnings per Share (EPS); organic generation of capital higher than net profit which allows a growing DPS with a pay-out ratio of up to 100% of net profit, while preserving strong capital solidity.

The comment

“With this industrial operation we want to mark a new approach in the path of consolidation of the banking sector which in an innovative way creates value immediately for both the shareholders of MPS and Mediobanca, and I believe also for the entire country system”, he declared Luigi LovaglioCEO of Banca Monte dei Paschi di Siena.

“We are aiming for a new national champion, with two brands of excellence, which we want to protect and enhance even more – he added – A new and modern, highly competitive banking group, leader in key specialist businesses and with strong financial solidity, which aims to play the role of supporting families, businesses and local communities in an increasingly virtuous way” .

“Together and for the benefit of all shareholders, we have the opportunity to create a player with a best-in-class and resilient global banking model, leveraging distinctive and complementary skills, extensive distribution networks and agile digital platforms. A unique business combination of talents, know-how, brands and values ​​– said Lovaglio – La right synthesis for Italian excellence on which to build a future of growth and innovation for the benefit of customers, employees, shareholders and all other stakeholders.”