By Giuseppe Fonte and Valentina Za
ROME (Reuters) – French bank Credit Agricole (OTC:) had informal backing from the Italian government before saying on Friday it would increase its stake in Banco BPM, two sources close to the matter told Reuters.
The rise intensifies a banking battle in Italy, which began when UniCredit last month made a takeover offer for Banco BPM, thwarting the government's plan to help bring about a merger between BPM and state-backed Monte dei Paschi di Siena.
Credit Agricole declined to comment.
Ruling out a full takeover bid, Credit Agricole said on Friday it had signed derivative contracts to increase its stake in BPM to 15.1% from 9.9%. It is seeking approval from the European Central Bank to purchase up to 19.99%.
The sources, who asked not to be identified due to the sensitivity of the matter, said that before acting, the French bank had informed and obtained informal approval from the government of Italian Prime Minister Giorgia Meloni.
Separately, a source familiar with Credit Agricole's strategy told Reuters the bank aims to strengthen its negotiating position to protect revenue-generating trade deals in its biggest market outside France.
Credit Agricole became the main investor in Banco BPM in 2022, shortly after a failed acquisition attempt of BPM by UniCredit.
Credit Agricole partners with BPM in insurance and consumer credit. Its asset management arm, Amundi, has a distribution deal with UniCredit that expires in 2027.
Present in Italy since 1972, Credit Agricole has grown steadily in the country, partly thanks to small acquisitions. Officials in Rome have previously told Reuters they have always reassured the government about their strategy, ruling out any overly aggressive measures to take market share.
The strategy has not changed, one of the sources said.
Approval from the Italian government, as well as the European Central Bank, is necessary for Credit Agricole to increase its stake in BPM.
The Italian government has “golden powers” that allow it to block or set conditions for domestic and foreign corporate takeovers in strategic sectors such as energy, telecommunications and banking.
Under Italian rules, the cabinet office must approve the share ownership of any strategic company listed in Milan when it crosses thresholds set at 3%, 5%, 10%, 15% and other ranges of up to 50%.
UniCredit CEO Andrea Orcel has said his bank could not afford to be sidelined as Italian banking consolidation accelerated. Banco BPM had decided to buy the fund manager Anima Holding and acquire a stake in Monte dei Paschi days before UniCredit launched its offer at a premium close to zero.
(1 dollar = 0.9463 euros)
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