New Move in Italy’s Intense Banking Battle
Mediobanca has entered the spotlight in Italy’s escalating banking takeover battle with a bold $7.15 billion bid for Banca Generali. The offer, valued at 6.3 billion euros, would be financed by handing over Mediobanca’s substantial stake in insurer Generali. This move, announced Monday, marks a strategic effort by Mediobanca to shift its focus toward wealth management and ease long-standing tensions with key shareholders.
Mediobanca’s CEO Alberto Nagel emphasized that the deal addresses criticism that the bank relies too heavily on its Generali holdings. “This is a financially sound move that removes that issue,” Nagel said. With a Generali stake worth around 6.5 billion euros, Mediobanca has enough firepower to complete the acquisition without tapping into other resources.
Mediobanca recently scored a victory against powerful rivals Francesco Gaetano Caltagirone and Delfin, the investment arm of Italy’s Del Vecchio family, by successfully securing 10 out of 13 board seats at Generali. Now, Nagel hopes to initiate discussions with Generali and Banca Generali to finalize the transaction.
A High-Stakes Strategy
The proposal involves offering Banca Generali shareholders an opportunity to exchange their shares for Generali stock. If enough shareholders accept, Mediobanca could reach a two-thirds ownership stake in Banca Generali. If not, Mediobanca plans to sell Generali shares on the open market to finance further acquisitions.
The battle for control reflects broader tensions in Italy’s banking industry, where hostile takeover attempts, once rare, are becoming more frequent. Mediobanca itself faces a hostile bid from Monte dei Paschi di Siena (MPS), backed by Caltagirone and Delfin, who have amassed nearly 20% of the Tuscan bank. Mediobanca shareholders are set to vote on the Banca Generali offer on June 16, giving them a clear choice between competing visions for the bank’s future.
“If our shareholders back this deal, they will be choosing one project,” Nagel stated, signaling confidence that shareholders will favor a strategic shift toward wealth management rather than merging operations with MPS.
Italian Banking Sector in Transformation
The intense consolidation push comes as Italian banks brace for tighter margins following a period of record profits driven by higher interest rates. Mediobanca’s proposed acquisition fits into this larger transformation by doubling its wealth management revenue, making it a cornerstone of its overall business.
At the same time, the deal puts Mediobanca in a better position to deepen partnerships with Generali in insurance and asset management, evolving from a purely financial relationship to an “industrial” one, as Nagel described. This move could also shield Mediobanca from future takeover attempts, strengthening its independence.
Meanwhile, Generali’s own future is under scrutiny. Despite receiving unexpected last-minute support from UniCredit, which bought a 6.7% stake in Generali, construction magnate Caltagirone secured only three seats on Generali’s board. The involvement of UniCredit raises further questions about the direction of Italy’s financial sector, particularly if it signals future wealth management collaborations or conflicts with rivals like Intesa Sanpaolo.
Market Reactions and Next Steps
Market response to the announcement was mixed. Shares in Generali fell 1.8%, as investors worried about losing a profitable business unit. Banca Generali’s stock, however, rose 7% following the news, while Mediobanca shares remained relatively stable.
The terms of the offer represent an 11% premium to Banca Generali’s last closing price, with each share valued at 54.17 euros. Nagel defended the high valuation, stating, “We’re paying more than the stock’s record high and more than price targets.”
Mediobanca expects to complete the exchange offer by the end of October, barring significant obstacles. If successful, the deal would not only reshape Mediobanca’s business model but could also mark a turning point in the fierce competition reshaping Italy’s banking landscape.