MILAN (Reuters) -Italy’s merchant bank Mediobanca received European Central Bank approval on Monday to buy private bank Banca Generali and create Italy’s second-largest wealth manager, as it seeks to thwart a takeover bid from Monte dei Paschi di Siena.
The ECB has also approved the acquisition of direct and indirect shareholdings that together amount to more than 10% of the Mediobanca Banking Group’s consolidated own funds.
The ECB’s green light paves the way for merchant bank Mediobanca to launch its offer if it wins shareholder backing at a vote due on August 21.
Mediobanca had originally scheduled the vote for June but had to push it back as the proposal lacked sufficient support.
Meanwhile, state-backed Monte dei Paschi (MPS) is attempting to buy Mediobanca, amid a consolidation wave sweeping Italian banking.
By cutting its MPS stake to below 12% from the 68% it acquired in a 2017 bailout, Rome has brought on board as leading MPS shareholders, Italy’s billionaire Del Vecchio and Caltagirone families.
To fend off the MPS bid, Mediobanca CEO Alberto Nagel, in April proposed buying Banca Generali, which is owned by Generali, Italy’s biggest insurer, whose key investors are Mediobanca, the Del Vecchios and the Caltagirones.
Under Italian takeover rules, Mediobanca needs shareholder approval for the Banca Generali deal due to the MPS bid, which would become more costly if Mediobanca buys Banca Generali.
Generali, which would acquire its own shares by tendering its 50.2% Banca Generali stake, said this month it was open to continue discussing the proposal.
(Reporting by Valentina Za and Devika Nair, editing by Gavin Jones and Marguerita Choy)
