By Elena Vardon

Mediobanca launched a bid to buy Banca Generali for 6.3 billion euros ($7.16 billion), betting on an acquisition of its own as it tries to fend off an unsolicited takeover offer from Monte dei Paschi.

The surprise move marks the latest twist in a wave of consolidation sweeping through Italy's crowded banking market. Beyond Mediobanca itself being a target, UniCredit is pursuing an acquisition of peer Banco BPM--which rejected the approach, and is simultaneously buying asset manager Anima Holding--while smaller lenders have also scurried to launch offers to defend their market positions.

Mediobanca is offering to buy the private bank, majority-owned by insurer Assicurazioni Generali, to bolster its wealth-management division. It intends to make Banca Generali a core profit driver, overtaking its corporate and investment banking activities.

The deal would be sizeable for Mediobanca, which had a market value of around 14.5 billion euros as of Friday's close.

Both Banca Generali and Assicurazioni Generali declined to comment.

Mediobanca is currently the Italian insurer's top shareholder and intends to exchange its 13% stake to pay for Banca Generali. "Through this large-scale reallocation of capital to [wealth management], the combination will transform the relationship between Mediobanca and [Assicurazioni Generali] from a financial investment to a strong industrial partnership," it said.

Shares in Banca Generali jumped as much as 9.7% on the news, before giving up some gains. Shares in Assicurazioni Generali were down 2% in European morning trading, while Mediobanca's shares were little moved.

Mediobanca--formally known as Mediobanca Banca di Credito Finanziario--has played a central role in the development of corporate Italy over the past few decades, with its web of overlapping shareholdings letting it pull strings across boardrooms. Last week at Assicurazioni Generali's annual meeting, shareholders backed the slate of board candidates put forward by Mediobanca, scoring a win against two key investors that have been at odds with Generali's management, Delfin and Caltagirone, and that are also backing Monte dei Paschi's bid for Mediobanca.

Delfin is an investment vehicle for the family of late eyewear billionaire Leonardo Del Vecchio, while Caltagirone is a holding company for the Roman tycoon Francesco Gaetano Caltagirone.

Italy's Banca Monte dei Paschi di Siena, still partly owned by Rome after a bailout, in January launched an all-share offer to buy Mediobanca, but the move was rebuffed by the target saying it was contrary to its interests and would destroy value.

Mediobanca's offer for Banca Generali makes the alternative of a merger with Monte Paschi less attractive, Equita SIM analyst Luigi de Bellis wrote in a note to clients. Equita advised Mediobanca on the Banca Generali offer.

Mediobanca Chief Executive Alberto Nagel said the deal would allow it to better capitalize on the transfer of wealth between generations and the rising demand for financial advice, and accelerates what the bank could have achieved organically over an eight to ten year period.

"For many years we have considered Banca Generali as the best M&A opportunity for us," Nagel said.

The bank expects the proposed merger to lead to around 300 million euros in synergies and increase its return on tangible equity--a key profitability metric for banks--to more than 20% from 14%.

Mediobanca will host a meeting on June 16 for shareholders to sign off on the transaction and expects the exchange offer to be completed by the end of October.

The exchange ratio has been set at 1.70 Assicurazioni Generali shares for each Banca Generali share excluding dividend payments, it said. This translates to 54.17 euros a share, which represents an 11% premium to Banca Generali's closing price on Friday.

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

(END) Dow Jones Newswires

April 28, 2025 05:43 ET (09:43 GMT)

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