M&A and Italian banks: a new challenge for European finance

In recent months, the Italian banking sector has been involved in a significant wave of mergers and acquisitions (commonly referred to as M&A operations), which have affected a wide range of banking institutions. These operations have led to a structural transformation of the national financial and banking market, laying the path for potentially even more significant future deals, with obvious repercussions and influence on the European economic system.

The motivations, methods, and objectives behind these transactions are diverse and varied, but they can still be interpreted through a common leitmotive, which this brief article aims to highlight.

Main institution involved

First of all, it could be helpful to briefly review the most significant completed, attempted, or ongoing transactions:

• UniCredit and Banco BPM:

On November 25, 2024, UniCredit launched a Swap Tender Offer worth €10.1 billion to acquire Banco BPM, Italy’s third-largest bank by size. UniCredit’s aim was to strengthen its position in the Italian market, narrowing the gap with Intesa Sanpaolo, the country’s largest banking group. However, the offer was rejected as it was deemed too low.

• MPS and Mediobanca:

In January 2025, Monte dei Paschi di Siena launched a takeover bid, considered hostile by the target, worth €13.3 billion to acquire Mediobanca, aiming to combine MPS’s commercial network with Mediobanca’s management expertise.

The Italian government, which holds the so-called “golden power” to protect strategic sectors in the national interest, approved the deal, though its success still depends on shareholder support and MPS’s ability to overcome resistance.

• Banco BPM and Anima Holding:

In November 2024, Banco BPM launched an offer to acquire 100% of Anima Holding, an asset management company, with the goal of strengthening its presence in the asset management sector.

Despite the ECB’s concerns regarding the use of the “Danish compromise” — a regulation that facilitates banks investing in insurance companies by easing capital management requirements, so named as it was introduced during Denmark’s presidency of the European Union — Banco BPM proceeded with the acquisition, reaching a 90% stake in Anima Holding by April 2025.

• Cherry Bank, Banca Popolare Valconca, and Banca Macerata:

Cherry Bank, a Milan-based institution, completed the merger of Banca Popolare Valconca on December 30, 2023, consolidating its position in the retail commercial banking sector — banking services aimed at a broad customer base, especially households and small businesses.

Subsequently, in April 2024, it acquired a 9.6% stake in Banca Macerata, becoming its main shareholder to strengthen its expansion strategy through partnerships with banks deeply rooted in their local areas.

• UniCredit and Commerzbank:

Perhaps the most high-profile operation was UniCredit’s acquisition of a significant stake in Commerzbank, bringing its holding to 28% in December 2024. Then, on April 14, 2025, the German antitrust authority gave the green light for UniCredit to increase its stake to 29.9%.

This transaction marked an important step toward the creation of a major banking group spanning Europe, paving the way for further deals aimed at building a robust and secure cross-border banking network at both international and EU levels.

Market context and motivations

These transactions are the result — and perhaps just the beginning — of a series of economic and financial factors that have affected Italy and Europe in recent years, creating the need for a structural rethink of the banking sector’s organization, especially in light of the economic policies pursued by the ECB.

Volatile interest rates, moderate and unstable economic growth, and strong regulatory pressure from the ECB have made it essential for banks to optimize capital usage, scale up operations, and reduce fixed costs. The only viable way to achieve these goals has been to strengthen their market positions and expand their commercial networks.

This has naturally triggered a market reshaping, favoring the largest and most financially stable institutions, which have further consolidated their positions by acquiring smaller, typically less stable banks.

Main objectives

The most significant goals pursued by the major banking groups involved can be summarized into four main categories:

1. Customer base consolidation:

Mergers between banking institutions allow for the creation of stable synergies across commercial networks, improving geographic coverage through a unified network capable of offering better services at lower costs by combining the technical expertise and local competitiveness of various market players.

2. Cost reduction and capital optimization:

By lowering management costs, as outlined in the previous point, and increasing available capital, each banking group emerging from these deals can manage resources more efficiently, potentially making larger investments to meet strategic management goals essential for the bank’s long-term success.

3. Market position reinforcement:

Naturally, increasing the size of an individual banking group enhances its market competitiveness, strengthening its bargaining power in negotiations and broadening its range of commercial offerings.

4. Regulatory and capital resilience:

Just as large banks are interested in expanding, smaller institutions may also be motivated to support such deals, as failure to do so could leave them vulnerable and risk exclusion from the market due to their limited size.

Final remarks

In conclusion, the M&A deals that have shaped the Italian banking sector — and beyond — over the past two years represent an important first step toward reorganizing the European financial market, whose stability is increasingly tested by ongoing global disruptions.

Given that one of the EU’s primary goals is to create a single market, the attempt to establish a unified European banking network is undoubtedly a virtuous initiative in principle, but it must be carried out with consistency and caution to safeguard all involved interests, especially those of clients.

Moreover, as highlighted by S&P Global Ratings, banking consolidation in Italy is proceeding in a “stop-and-go” trend, hindered by complex shareholder structures and strategic holdings that make hostile bids difficult and may prevent the desired outcomes.

The road ahead is still long, but the strategies implemented over recent months mark a significant turning point in the reorganization of such a complex sector.

CC: Alessandro Chiaromonte