The European Central Bank (ECB) is close to clearing, with conditions, a request by France's Credit Agricole (CAGR.PA), opens new tab to raise its stake in Italy's Banco BPM (BAMI.MI), opens new tab, several Italian media reported on Sunday.
Credit Agricole is a long-standing BPM commercial partner and the single largest shareholder in the Italian lender, with a stake of just above 20%.
The conditions set by the ECB will regard the governance, Ansa news agency reported, with the French group having to limit its representatives in Banco BPM's board to seven members, to avoid a "de facto takeover" and avoid conflicts of interest.
Credit Agricole has been working with Deutsche Bank (DBKGn.DE), opens new tab and Rothschild on a potential merger of its Italian arm with Banco BPM, Reuters reported in September.
The Italian lender is weighing options after a failed takeover attempt by larger rival UniCredit (CRDI.MI), opens new tab. After receiving the ECB's approval, Credit Agricole will raise its stake in two steps, initially to 24.9% and then to 29.9%, Italian daily Corriere della Sera reported.
It said both moves would be completed by April, when the Italian lender is scheduled to approve its 2025 results and is set to nominate a new board.
Banco BPM and Credit Agricole declined to comment. The ECB did not immediately respond to a Reuters request for comment.
