The European Central Bank (ECB) has granted provisional approval to Intesa Sanpaolo’s €35 billion takeover bid for Monte dei Paschi di Siena (MPS).

The deal is now pursuant to approval by the Italian securities regulator the Commissione Nazionale per le Società e la Borsa (Consob), followed by the Italian Competition Authority.

Both are expected to reach their final decisions before the end of 2026. If the deal goes through, the addition of MPS’s assets to Intesa would make it the eurozone’s second-largest listed bank at a stroke, with a capitalisation of around €126 billion.

Intesa announced its takeover plan for MPS in June, with an offer of €10.09 per share worth €30.6 billion at the time. The bank has worked to address anti-competition concerns since the outset of its bid, with a commitment to sell approximately half of MPS’s 1,252 branches to the Italian insurer Unipol.

Under the plans, Unipol would pay €3.5 billion for the assets and roll them into BPER Banca, in which it is the majority shareholder.

Luigi Lovaglio, chief executive of MPS, launched defensive all-share bids for Banco BPM and Banca Generali in August, worth €34 billion, to fend off Intesa’s bid.

In the months since, Lovaglio’s plan has been repeatedly challenged.

At the start of October, MPS’s largest shareholder Delfin backed Intesa’s offer. The holding company for the billionaire Del Vecchio family said it had agreed to tender its 534.7 million shares, which give it a 17.6 per cent stake in MPS.

This was followed by a similar statement from Edizione, the Benetton holding company, which said it will support Intesa’s bid tender its 1.45 per cent stake and.

Intesa has offered shareholders an additional €800 million in cash if they reject Lovaglio’s plan in a vote due to be held 29 October.

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