To stave off the MPS acquisition, Mediobanca CEO Alberto Nagel put forth the takeover of Banca Generali in April. Banca Generali is owned by Italy’s biggest insurer, Generali.
Italian merchant bank Mediobanca has received approval from the European Central Bank (ECB) to acquire private bank Banca Generali. This acquisition would create the country’s second-largest wealth manager, and Mediobanca would also beat out the state-backed Monte dei Paschi di Siena (MPS), which in turn has bid to take over the merchant bank.
Direct and indirect shareholdings together amount to over 10% of Mediobanca Banking Group’s consolidated own funds, and the ECB has approved the takeover of these shareholdings as well. This approval, coupled with victory at the shareholders’ vote to be held on August 21, will allow Mediobanca to launch its offer.
Mediobanca was compelled to push the vote to August from June, as the proposal had not yet received the required support. Meanwhile, MPS is on a bank consolidation spree and has been working overtime to acquire Mediobanca.
Upon reducing its stake from 68% to 12%, the bank has inducted leading MPS shareholders, Italy‘s billionaire Del Vecchio and Caltagirone families, into the Group. To stave off the MPS acquisition, Mediobanca CEO Alberto Nagel put forth the takeover of Banca Generali in April. Banca Generali is owned by Italy’s biggest insurer, Generali, and the bank’s primary investors are Mediobanca, the Del Vecchios and the Caltagirones.
In accordance with the country’s acquisition regulations, the bank is mandated to seek shareholder approval to buy out Banca Generali due to the MPS takeover. This, however, could prove to be more expensive if the merchant bank follows through on buying Banca Generali.
The insurer is welcoming further discussions regarding this deal, as Generali would acquire its shares by tendering its 50.2% Banca Generali stake. Earlier this week, the Italian insurer said that, along with considering Mediobanca’s bid, it is also considering a revised distribution agreement with the bank, as it is a vital part of the proposed deal.
Generali reported operating profit of 4 billion euros, up 8.7%, and adjusted net profit of 2.2 billion euros, up 10.4%, for the first half of the year. The company planned to start a 500 million euro share repurchase soon and hopes to finish it by the end of the year.
Mediobanca intends to break a long-standing connection with the insurer and establish a business partnership by using its 13% holding in Generali to pay for Banca Generali. An agreement to market insurance and asset management products with Generali is a requirement of the offer.
The Milan-headquartered Mediobanca wishes to hasten the acquisition process to fend off the hostile takeover attempts of MPS. This bid was initiated in January and is part of a dozen takeovers initiated by MPS to reshape the Italian financial landscape.
The bank declared that it was prepared to start a new tranche of its 400 million euro share repurchase program. Last month, the company said that it would return 4.9 billion euros to shareholders over the next three years. It also reported record-high revenue and a 4% rise in full-year profitability, both of which were consistent with forecasts.
The merchant bank reported a 4% increase in its 2025 fiscal year net profits, recording 1.3 billion euros. Mediobanca’s revenue was also at a new record high at 3.7 billion euros, reporting a 3% climb.
It was reported in January that MPS has proposed to offer 23 of its own shares for every 10 Mediobanca shares tendered. MPS CEO Luigi Lovaglio described the offer as friendly and an attempt to preserve the Mediobanca name in the investment banking sector.
While the government-backed MPS is determined to acquire the merchant bank, Mediobanca is putting up a strong fight against this takeover. With a positive response from Banca Generali and its favourable performance over the past fiscal year, it appears as though MPS’s aim of buying out the bank is proving to be more challenging than it had expected.