(Bloomberg) -- Credit Agricole SA’s move to boost its stake in Banco BPM was aimed at protecting its business interests in Italy after UniCredit SpA made a takeover bid for its smaller Italian rival.
The French bank’s increased holding — to about 15% from around 10% — would give Chief Executive Officer Philippe Brassac a stronger position in negotiations on commercial agreements with both Banco BPM and UniCredit, people familiar with the matter said, noting that the deals are key for revenue generation in Italy.
Banco BPM gained as much as 3.9% at opening in Milan trading.
Credit Agricole has a complex network of ties with both Italian banks. It is a major partner for Banco BPM in consumer credit and non-life insurance joint-ventures, while its asset management arm Amundi SA relies on UniCredit for much of its sales in Italy.
The higher stake could give the French bank added leverage in expected discussions with Banco BPM and UniCredit as it looks to underpin its position in the country.
Brassac and UniCredit CEO Andrea Orcel have been trying to schedule a meeting in the next few weeks to discuss the Italian bank’s takeover bid, Bloomberg News has reported.
An extension of Amundi’s contract and the sale of minority holdings in Banco BPM’s consumer credit unit Agos Ducato will be part of the negotiations, some of the people said, asking not to be identified discussing private information.
Representatives for Credit Agricole and Banco BPM declined to comment. The news of Credit Agricole’s increased stake in BPM “changes nothing” for UniCredit, a spokesman for the Milan-based lender said in a LinkedIn post Saturday, adding that it remains prepared to negotiate with Credit Agricole.
Still, the stakes now look even more significant for all the players involved. Upping its Banco BPM stake to 15% makes Credit Agricole the lender’s largest shareholder by far, while a successful bid on its Italian competitor would make UniCredit the country’s top bank by total assets, ahead of Intesa Sanpaolo SpA.
The announcement of the offer for Banco BPM last month stunned many observers, not least because Orcel is already weighing an acquisition of Germany’s Commerzbank AG. Banco BPM’s board has initially rebuffed UniCredit’s proposal.
The bid could also get in the way of Italian government efforts to create another big domestic lender. Rome is monitoring developments and Prime Minister Giorgia Meloni has said she could move against the deal if she concludes it’s against the national interest.
Her government gave informal approval to Credit Agricole’s plan to buy more shares in Banco BPM, Reuters reported Saturday.
Brassac put in calls to his counterparts at the two Italian lenders and to the Italian government to inform them his bank was boosting its stake hours before the move was officially announced, the people familiar said.
Separately, Banco BPM is considering asking Italian market regulator Consob for an exemption to the so-called passivity rule, which prevents companies targeted in takeovers from making strategic moves of their own, Il Sole 24 Ore reported.
(Updates with Banco BPM shares reaction)
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