The bid by Mediobanca – which is subject to shareholder approval in June – highlights how Italy's wealth and financial services business is busy with M&A activity.

Milan-headquartered Mediobanca is making a €6.3 billion ($7.17 billion) bid for Banca Generali, to build a major wealth management business, it announced yesterday.  

The bid, in the form of a voluntary exchange offer, will be paid for entirely in Assicurazioni Generali shares, Mediobanca, which already has a private banking arm, said in a statement. Mediobanca will call a shareholder meeting on 16 June to get investor approval for the bid. The deal would offer Mediobanca a boost to return on tangible equity of 20 per cent from 14 per cent currently, it said. The lender said it expects about €300 million in synergies from the transaction. 

Shares in Mediobanca were down 0.8 per cent yesterday, at €17.45 per share.

“The deal entails the sale of Mediobanca’s investment in Assicurazioni Generali, with €6.3 billion to be simultaneously invested in Banca Generali,” Mediobanca said. “Through this large-scale reallocation of capital to [wealth management], the combination will transform the relationship between Mediobanca and AG from a financial to a strong industrial partnership.”

Mediobanca said the deal would “strongly accelerate execution of the “One Brand-One Culture” strategic plan, would “transform” the group into a wealth management industry leader, with €210 billion in total financial assets, €2 billion of revenues, and net new money inflows of €15 billion a year. Wealth management revenues would expand by two times to €2 billion (or 45 per cent of consolidated revenues) and net profit would rise four times €800 million (or exactly half of the group’s net profit).

Chief executive Alberto Nagel’s has mulled a bid for Banca Generali for some time, media reports said. 

A report by Bloomberg yesterday said the timing and share swap used to pay for the transaction would help the CEO escape a hostile bid for his own business by Banca Monte dei Paschi di Siena. 

Mediobanca already owns 13 per cent in Generali, making it the largest investor.

Mediobanca issued its full-year financial results for 2024 here. This publication recently interviewed one of the lender's businesses, its Monaco-based private bank, CMB Monaco, about its strategy. 

In its statement, Mediobanca said it would have a Common Equity Tier 1 capital ratio of 14 per cent if the deal went through. 

The bid comes at a time when Italian banks' M&A activity has been brisk. In March, the European Central Bank gave UniCredit authorisation to acquire a direct stake in Frankfurt-listed Commerzbank of up to 29.9 per cent. In November last year, Banco BPM, through its subsidiary Banco BPM Vita, launched a voluntary public tender offer to acquire Anima Holding, an independent asset manager in Italy.