Banco BPM, Credit Agricole sign confidentiality deal ahead of possible tie-up -report

Credit: REUTERS/STEPHANE MAHE

Italy's Banco BPM and France's Credit Agricole have signed a confidentiality agreement as they prepare to open formal talks over a possible merger, daily Il Messaggero reported on Thursday.

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MILAN, Oct 15 (Reuters) - Italy's Banco BPM BAMI.MI and France's Credit Agricole CAGR.PA have signed a confidentiality agreement as they prepare to open formal talks over a possible merger, daily Il Messaggero reported on Thursday.

A person close to BPM told Reuters that Italy's third-largest bank was open to discussing merger options with all potential partners, but added that recent contacts with Credit Agricole had focused on their consumer credit partnership.

Sources have told Reuters that Credit Agricole had been studying possible acquisitions to expand its Italian business and had zeroed in on Banco BPM, which has roots in Milan's wealthy Lombardy region, the country's industrial heartland.

Il Messaggero said the accord followed telephone talks between BPM Chief Executive Giuseppe Castagna and Credit Agricole's CEO Philippe Brassac and will allow the banks to exchange information and data, although advisers had not yet been formally appointed.

The newspaper said that Banco BPM would represent 55-60% of the new business that would be created after an exchange offer.

Credit Agricole declined to comment.

Banco BPM has been studying possible deals after rival UBI was bought by Intesa Sanpaolo ISP.MI this year in a $4 billion cash-and-paper deal which UBI's management tried in vain to fight off.

Sources have said there had been preliminary contacts between BPM and Credit Agricole, adding however the French bank wanted to tread carefully and see how Rome's efforts to find a buyer for bailed-out Monte dei Paschi di Siena BMPS.MI developed.

(Reporting by Giulio Piovaccari and Gianluca Semeraro in Milan; Maya Nikolaeva in Paris; Writing by Valentina Za; Editing by Giulia Segreti and Alexander Smith)

((valentina.za@tr.com; +39 02 6612 9526))

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