Monte dei Paschi di Siena and Mediobanca Move Forward with Full Merger
The Italian banks, Monte dei Paschi di Siena (MPS) and Mediobanca, have confirmed in a joint release that they are taking concrete steps towards a full merger. This is part of a wider restructuring plan aimed at strengthening their financial position and streamlining their operations.
Details of the Merger
Under the proposed terms, MPS plans to issue up to 1.6 billion euros ($1.9bn) in new shares, as reported by Reuters. It is intended that Mediobanca shareholders would receive 2.45 MPS shares for each Mediobanca share offered. This move is designed to allow MPS to acquire the remaining 14% of Mediobanca it does not currently own, with the ultimate goal of making the company private.
Restructuring Plan
The planned merger is part of a broader restructuring strategy. This includes assigning corporate and investment banking, along with private banking services for high-end clients, to a wholly owned and unlisted BMPS subsidiary that will operate under the name “Mediobanca S.p.A.”
The restructuring also involves bringing together the financial advisor networks, as well as retail and affluent wealth management operations of Mediobanca Premier and Banca Widiba. The latter is set to adopt a revised corporate name that reflects the Mediobanca brand.
Benefits for Mediobanca Shareholders
If both the merger and reorganization are successfully completed, Mediobanca shareholders stand to gain several benefits. These include increased liquidity from BMPS shares, participation in BMPS’s announced dividend policy, potential access to further shareholder distributions, and involvement in the future plans of the BMPS group.
Consistency with Group Strategy
These developments align with the combined group strategy presented by outgoing MPS chief executive Luigi Lovaglio in February. The search for a new CEO is ongoing, with three candidates proposed by MPS for an April shareholder vote. As of now, no alternative candidates have been put forward.
Future Plans
MPS has announced a 2030 adjusted net profit target of €3.7bn ($4.4bn) and expects to finalize its merger with Mediobanca by the end of the year. The bank also plans to deliver all anticipated merger benefits by 2028.
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