Mergers, Acquisitions and Takeovers Case Study

Banca Intesa – Sanpaolo Merger: Set to Create Italy’s Largest Bank

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Abstract:
On October 12, 2006, Milan based Banca Intesa S.p.A and Turin based Sanpaolo IMI S.p.A agreed to merge to create Italy’s largest bank that would surpass UniCredit S.p.A., the dominant local lender in Italy. Banca Intesa S.p.A. (formerly known as IntesaBci) and Sanpaolo IMI S.p.A. were the second and third largest banks in Italy with each having more than 3000 branches in and around Italy. The merged entity would be legally based in Turin in northern Italy with its operating headquarters in Milan. It would have EUR 507.5 billion ($650 billion) in combined assets and a market capitalisation of around EUR 70 billion ($87.85 billion), which would rank the merged entity sixth among the European banks and the largest in Italy. The merged entity would have 13 million customers in Italy which would be twice as large to what UniCredit S.p.A had. In terms of assets, the merged entity would have 540.9 billion euros that would surpass Unicredit S.p.A by a wide margin. The deal was supposed to be the effect of a consolidation wave that had been looming around the fragmented banking sector in Italy. Domestic banks were uniting themselves to match their potential with their foreign partners apart from competing with Italy’s dominant local lender, UniCredit S.p.A.

Pedagogical Objectives:

• To understand the role of mergers in the growth strategy of the banking companies
• To analyse the benefits and drawbacks of mergers associated with banking companies
• To study the impact of the Banca Intesa-Sanpaolo merger on the Italian banking sector
• To understand the potential synergies of the merger.

Keywords : Mergers,Acquisitions,Alliances Case Study;Milan; Turin; Banca Intesa; Sanpaolo; Unicredit; Italy; American depositary receipt (ADR); Entity; Bank; Euros; Assets; Rating; Market; European; Merger

Contents : 
Sanpaolo IMI S.p.A
Expected Synergies
Organizational Structure of Banca Intesa
Organizational Structure of the Gruppo Sanpaolo IMI
Historical development of Sanpaolo IMI S.p.A