Crédit Agricole lifts stake in Italy’s Banco BPM in blow to UniCredit bid #ItalyFinance

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France’s Crédit Agricole has boosted its stake in Banco BPM in a move that will complicate UniCredit’s approach for the Italian lender.

Crédit Agricole, which is already Banco BPM’s largest shareholder, said on Friday that it had entered into financial contracts that will lift its holding in the lender from 9.9 per cent to 15.1 per cent. It added that it would seek approval from Italian regulators to own up to 19.99 per cent of Banco BPM.

The move by the French lender, which mirrors UniCredit’s use of derivatives to build a surprise stake in Germany’s Commerzbank earlier this year, comes after Banco BPM rejected its Italian rival’s €10.1bn takeover bid late last month.

The approach marked UniCredit chief executive Andrea Orcel’s latest attempt to forge a European banking champion. It also surprised Italian officials, coming just weeks after Banco BPM took a 5 per cent stake in rival Italian lender Monte dei Paschi di Siena.

Italian Prime Minister Giorgia Meloni’s government had hoped that Banco BPM could spur consolidation in the country’s banking sector, potentially merging with MPS and BPER Banca, to compete with UniCredit and Intesa Sanpaolo, the country’s largest lender.

Orcel and Crédit Agricole chief Philippe Brassac had been due to meet to discuss the Banco BPM takeover bid, according to one person with knowledge of the talks.

UniCredit said in response to the news about Crédit Agricole’s increased stake in BPM that it “changes nothing for UniCredit. We were always prepared to negotiate with CA, as this would have been necessary whatever the scale of their shareholding.”

Banco BPM said last month, when it rejected UniCredit’s overture, that it remained “focused on the implementation of its 2023-2026 business plan and on its takeover of [asset manager] Anima”.

However, under Italy’s so-called passivity rule, as the target of a takeover offer, Banco BPM cannot buy further stakes in MPS nor increase its takeover offer of more than €1bn for Anima for the next six months. The rule is aimed at barring target companies from making moves that can affect the outcome of a pending takeover bid.

The Italian government has been looking at ways to help Banco BPM fend off UniCredit’s approach, according to people with knowledge of the deliberations. Italy’s finance minister Giancarlo Giorgetti told reporters last month that Rome could resort to its so-called golden powers, which are designed to block foreign takeovers of strategic national assets, to impose conditions on UniCredit’s attempt to take over Banco BPM.

Last week the government denied it had been considering passing an emergency decree to allow Banco BPM to overcome the passivity rule.