Italian merchant bank Mediobanca has cleared a key hurdle in its €6.3 billion pursuit of private bank Banca Generali after the European Central Bank approved the deal, bringing the creation of Italy’s second-largest wealth manager a step closer.

The watchdog’s decision also permits Mediobanca to acquire direct and indirect holdings exceeding ten per cent of the group’s consolidated own funds. According to the ECB’s authorisation, the Milan-based lender must file within six months an integration plan covering governance, technology and capital impacts, as well as a detailed timetable for streamlining internal controls. The approval follows sign-off from the Bank of Italy on related subsidiary acquisitions, leaving no further regulatory barriers.

Shareholders will vote on 21 August. Mediobanca postponed the ballot in June after gauging insufficient support, but analysts say the ECB’s green light could sway undecided investors. Chief executive officer Alberto Nagel hopes the purchase will shield the group from a €13.3 billion all-share takeover attempt by state-backed Monte dei Paschi di Siena, part of a broader consolidation wave in Italian banking.

Mediobanca has been blunt about its resistance to the MPS approach, calling the proposal “destructive” for the business and lacking “industrial and financial rationale” for shareholders. The bank plans to finance the Banca Generali bid partly by selling its stake in insurer Generali, whose own 50.2 per cent holding in Banca Generali would be exchanged for Generali shares under the terms of the offer.

Generali has indicated it is prepared to keep talking, stating this month that it will “evaluate the proposal in accordance with its internal review processes”. The insurer’s stance matters because its main investors include Mediobanca and the Del Vecchio and Caltagirone families, all influential voices within Italian finance.

If the transaction closes, Banca Generali will be reclassified as a “significant supervised entity” under direct ECB oversight, tightening regulatory scrutiny of the enlarged group. Market observers suggest the move would double Mediobanca’s assets under management and reinforce its wealth-management franchise at a time when rising rates and volatile markets are reshaping revenue streams.

The shareholder meeting next week will determine whether the strategic gamble pays off. Should investors endorse the plan, Mediobanca says it can integrate operations swiftly and present detailed synergies to regulators before the year ends.

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