ECB clears Intesa Sanpaolo to take control of Monte dei Paschi

what happened

Italy's largest bank, Intesa Sanpaolo, said on Tuesday that the European Central Bank has cleared it to take control of Monte dei Paschi di Siena. The approval moves forward the €32 billion ($36 billion) cash-and-share offer, although the decision had been widely anticipated.

Next up is Consob, Italy's market regulator, which is expected to sign off on the offer document early next month. Italy's antitrust authority will then rule, with a decision expected in the second half of November. Intesa may open the tender period once Consob approves, without waiting for the antitrust ruling.

The antitrust review is the key hurdle. Intesa has already agreed to hand half of MPS's branches to Unipol, which will combine them with BPER's network, and sources told Reuters it may need to divest a few dozen more. The regulator is also looking at insurance, where Intesa overlaps with Generali. Once the MPS deal closes, Intesa would indirectly hold 13.4% of Generali.

why it matters

For the market, the ECB nod removes one of the main regulatory obstacles, but the final shape of the deal will depend on the antitrust decision and any conditions set on the Generali stake and its accounting treatment.

market impact

Italian banks: ECB nod clears a key hurdle, keeping focus on Intesa Sanpaolo and MPS shares

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