Italian bank merger
Italy's closely-held bank industry has been slow to consolidate with either in-country acquisitions or foreign takeovers. Dutch-based ABN Amro and French-based BNP Paribas broke into the market over the last year, buying midsize banks. This week a big deal was announced between Milan-based Banca Intesa SpA and Turin-based Sanpaolo IMI SpA. Intesa will buys Sanpaolo for around $37.5 billion.
The new bank would have control over 20% of Italy's retail banking. The idea is that that would give the company a commanding position in Italy and a basis for looking abroad for more deals.
The increase in deals comes as Italian bank regulators stop blocking outside deals, which has started to spur competition. This deal still has many obstacles to get over, including shareholder votes and union issues. Not least is Credit Agricole SA, the French banking giant that owns 18% of Intesa. It will have 9% of the merged bank.
Update 8/30/06: Already the rumors of the next Italian bank to get bought are flying, with Lodi-based Banca Popolare Italiana (BPI) topping the list. Four other Italian banks have expressed interest in axquiring the mid-size bank.
