07:13 AM EST, 11/09/2026 (MT Newswires) -- Crédit Agricole (ACA.PA) put forward a "friendly" proposal to merge its Crédit Agricole Italia subsidiary with Banco BPM (BAMI.MI), in a bid to create the third-largest banking group in Italy. Following the news, Banco BPM's shares jumped over 10% in Milan as of midday Monday, while the French banking group's stock was marginally lower in Paris. Under the proposed transaction announced Monday, Crédit Agricole is offering an exchange ratio that provides Banco BPM shareholders a 20% premium on their stock, alongside an extraordinary dividend of 1 billion euros. "This strategic project would create Italy's third-largest banking group, serving 6.5 million customers through more than 2,300 branches, by combining a strong local presence, financial strength, and business expertise," the French group said. "The project aims to preserve the identity and operational autonomy of the combined entity, with a balanced governance structure." Crédit Agricole's existing 29.6% stake in Banco BPM is expected to increase to 45% of the potential combined entity as a result of the proposed deal. The new entity would be an Italian fully integrated financial services group and remain listed in Milan, with Banco BPM's current chief executive officer, Giuseppe Castagna, set to lead the merged group. The French bank expects the combined group to generate 800 million euros of synergies annually and boost Banco BPM's EPS by an estimated 24% in 2027. Crédit Agricole has submitted the proposal to Banco BPM's board for review. The proposed deal could complete in the second half of 2027, subject to approval by Banco BPM's shareholders and regulatory clearances.

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