Monte dei Paschi Fights Takeover With €34bn Counter-Bids

The board of Banca Monte dei Paschi di Siena, the world's oldest bank, defended itself against a €30.6 billion takeover bid from Intesa Sanpaolo by launching its own share-exchange offers for Banco BPM and Banca Generali, totalling roughly €34 billion, according to an analysis published by Project Syndicate. The decision, reached after seven hours of deliberations on August 20, also included distributing another €4 billion to the bank's own shareholders.

Monte dei Paschi, founded in 1472 and rescued by Italian taxpayers in 2017, has thus turned from target to aggressor in a single stroke. The episode underscores how the Italian banking sector remains a contested arena, with the government still holding a significant stake in the Siena-based lender after its state bailout nearly a decade ago.

The counter-bids represent a striking reversal for a bank that was on the brink of collapse in 2017 and required a €5.4 billion state rescue. Project Syndicate's analysis, written by Lucrezia Reichlin, argues the affair reveals a deeper problem: EU policymakers have focused on making governments surrender influence over national banking systems, when they should instead be building a European financing channel.

For Piedmont, the affair carries particular weight. Turin remains the historic headquarters of Intesa Sanpaolo, Italy's largest retail bank, and the city's economy is closely tied to the lender's fortunes. A successful Intesa takeover of Monte dei Paschi would have consolidated much of Italy's retail banking under a Turin-based group. The counter-offer now places Banco BPM and Banca Generali in play, with consequences for competition across the northern banking landscape.

Reichlin's commentary, published under the headline 'What the World's Oldest Bank Reveals About EU Financial Integration,' argues the episode shows why Brussels should prioritise building a genuine European financing channel over dismantling national influence in banking. The analysis notes that the government's continued role in Monte dei Paschi complicates any purely market-driven resolution.

No outcome is yet clear. The offers remain subject to shareholder and regulatory approval, and Intesa Sanpaolo has not publicly withdrawn its bid. The coming weeks will determine whether Monte dei Paschi's defensive gambit succeeds in preserving its independence or merely reshuffles the deck in Italian banking.