Italy’s CDP Opposes Nexi’s Proposal to Sell Majority Stake in Digital Banking Division
Italy’s Cassa Depositi e Prestiti (CDP), a significant stakeholder in the payment group Nexi, has voiced its opposition to Nexi selling a majority stake in its digital banking solutions business to private equity firm TPG. These reports were confirmed by Reuters, who cited two sources close to the matter. The move is viewed by CDP and some senior Italian officials as a strategic error, considering the importance of the banking-services division. You can read the original source report Here.
Nexi’s Proposal from TPG
Recently, Nexi received a proposal from TPG to acquire several of its assets within the division that provides digital services to banks. TPG’s offer is estimated to be around €1bn ($1.16bn). However, Nexi has not disclosed the offer’s value and mentioned that the bid is subject to certain conditions.
The Significance of Nexi’s Division
Nexi’s division is considered vital because it includes Italy’s national interbank network, which stretches over 200,000km and is linked to the Bank of Italy for the settlement of banking transactions. Additionally, it provides technology for open banking, corporate banking services, and interbank clearing systems. In 2020, the unit generated core earnings of €155m.
Market Pressures
Nexi is currently under competitive pressure from fintech firms and instant payment platforms that have significantly eroded its market share and compressed margins. The company’s shares are currently trading just above €4 ($4.6), giving Nexi a market value of almost €5bn ($5.8bn). This is a significant decrease from its peak valuation of over €20bn ($23.15bn) in July 2021.
CDP’s Other Initiatives
Meanwhile, CDP is involved in other notable projects. In collaboration with the Food and Agriculture Organization of the United Nations (FAO) and the EU, CDP is set to launch the TERRA programme. This initiative aims to support lending for agrifood MSMEs in Africa and Türkiye. The programme is backed by an EU guarantee of up to €109.5m, with FAO providing technical assistance to local lenders.
Last year, CDP also announced its support for Italy’s fund, contributing an initial investment of €1bn ($1.09bn) to back artificial intelligence (AI) initiatives. This move demonstrates CDP’s commitment to pioneering technological advancements in various sectors.
