Mediobanca, an Italian investment bank, has initiated a €6.3bn proposal to acquire Banca Generali, a move intended to bolster its autonomy amidst ongoing tensions with key shareholders.
Banca Generali is an Italian financial institution specialising in private banking and wealth management services for high-net-worth individuals.
The bid aims to be funded through Mediobanca’s stake in insurance company Assicurazioni Generali, where the bank holds the position of the largest investor.
The strategic manoeuvre comes as a response to opposition from other significant shareholders, Francesco Gaetano Caltagirone and Delfin, who hold substantial shares in both Generali and Mediobanca.
The rivalry between these parties has escalated with Caltagirone and Delfin acquiring nearly 20% of Monte dei Paschi di Siena and backing its unsolicited bid for Mediobanca, reported Reuters.
In an effort to strengthen its position, Mediobanca’s offer for Banca Generali includes a public voluntary exchange offer for all shares, with plans to finance the acquisition entirely through shares in Assicurazioni Generali.
The proposed acquisition is expected to significantly impact Mediobanca’s operations by enhancing its wealth management capabilities.
The transaction aligns with the bank’s “ONE BRAND-ONE CULTURE” Strategic Plan, aiming to position the Mediobanca Group as a leading entity within the wealth management sector across Europe.
Post-acquisition, wealth management is anticipated to become the core focus of Mediobanca’s business activities, doubling its revenues to €2bn and significantly boosting its net profits.
This merger is projected to yield substantial synergies amounting to approximately €300m, derived from cost reductions, increased revenue, and funding improvements. Additionally, the deal is anticipated to enhance shareholder value by increasing returns on tangible equity (ROTE) and consolidated net profit while maintaining a strong CET1 ratio.
The acquisition necessitates Mediobanca selling its current investment in Assicurazioni Generali, reallocating €6.3bn into Banca Generali, thus transitioning from a financial relationship with Assicurazioni Generali to an industrial partnership. This shift aims to leverage Mediobanca’s private and investment banking model to strengthen its advisory role for businesses and entrepreneurs while delivering value for employees and shareholders.
