The boards of Banca Popolare di Milano and Banca Popolare dell'Emilia Romagna have approved a 5.45 billion euro deal that will create Italy's sixth-largest bank in the continuing consolidation of Italy's banking sector.
Under the deal announced Sunday, Banca Popolare di Milano will offer 1.76 of its own shares for each Popolare dell'Emilia Romagna share to create a bank with total assets of 85 billion euros ($114.55 billion) and a market capitalization of 12 billion euros ($16.17 billion).
That will make it Italy's sixth-largest bank, assuming the deal announced Sunday for Unicredit to acquire Rome-based Capitalia goes ahead, and the third-largest mutual bank. Mutual banks allow just one vote per shareholder regardless of the number of shares held.
The new bank will have some 3 million customers, nearly 1,900 branches with a market share of 5.9%, a and net income of 746 million euros ($1 billion), according to the banks' statement.
The new holding company's headquarters will be in Modena and Milan. BPM's chairman Roberto Mazzotta will become the new entity's chairman, while Guido Leoni, chief executive of BPER, will be the new bank's chief executive. Fabrizio Viola, general manager at BPM and BPER's general manager Ettore Caselli will be appointed general manager and co-general manager, respectively.
Approval from the Bank of Italy is expected by the end of June, while the two banks' extraordinary general shareholders meetings to approve the merger will be held in October, with the merger itself expected to be completed by the end of December.
With two major deals in 2006, Italy had 95 mutual banks with 8,601 branches at the end of April, according to data provided by the Italian association of mutual banks Assopopolari. Italian mutual banks have a 26.6% market share with more than 8 million clients.
In 2006, Italy's largest mutual bank Banco Popolare di Verona e Novara announced the acquisition of rival Banca Popolare Italiana, the first merger in the sector. A few weeks later, mutual lender Banche Popolari Unite agreed to merge with retail bank Banca Lombarda, forming Unione di Banche Italiane.