By Elena Vardon

Italy's Banca Monte dei Paschi di Siena launched an 13.3 billion-euro ($13.86 billion) offer to buy peer Mediobanca Banca di Credito Finanziario, the latest sign of dealmaking appetite among European banks.

The lender--which is still partly owned by the Italian government--said is offering an exchange ratio valuing each Mediobanca share at 15.992 euros, a 5% premium based on Thursday's closing prices, it said Friday. Mediobanca shareholders will get 23 newly issued MPS shares for each 10 they tender.

The move is the latest amid a wave of consolidation in the European banking industry in recent months, with Italy seeing a number of deals. It would create the country's third largest entity in the sector in terms of assets and deposits behind Intesa Sanpaolo and UniCredit.

"MPS intends to play an active role in the ongoing consolidation scenario in the Italian banking sector," the lender said in a statement.

MPS has turned a corner in the past three years under Chief Executive Luigi Lovaglio and has been reporting profitable results. The Italian government intends to return the Tuscan bank it bailed out in 2017 to private ownership and in November lowered its shareholding to 11.7%, allowing peer Banco BPM and asset manager Anima Holding to grab a stake.

A combined group will supplement MPS's retail and commercial banking activities with Mediobanca's expertise in wealth management, corporate and investment banking and consumer finance, it added.

The newly formed entity is expected to have a pro-rate return on tangible equity of around 14% and a common equity tier one ratio of around 16%, along with 700 million euros pretax synergies a year and 600 million euros in integration charges during the first year, MPS said.

The transaction is expected to close by the third quarter.

Mediobanca declined to comment.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

January 24, 2025 02:47 ET (07:47 GMT)

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