Investigation Launched into Italy's MPS Bank and Mediobanca Acquisition

The entrance of Monte dei Paschi di Siena bank in Rome, Italy, is seen in this 2018 photo. REUTERS/Max Rossi In a significant development, Italy's Monte dei Paschi di Siena (MPS) and its two largest shareholders are now under investigation in Milan concerning the bank's acquisition of Mediobanca. MPS, which has been under the leadership of Luigi Lovaglio since early 2022, acknowledged receipt of allegations against its 70-year-old CEO and confirmed its cooperation with authorities. In a statement, MPS expressed confidence in its ability to provide all necessary information to demonstrate the appropriateness of its actions, reaffirming its trust in the competent authorities. The €16 billion ($19 billion) acquisition, completed in September, marked MPS's control over Milan-based investment bank Mediobanca and is the largest deal in the ongoing merger wave redefining Italy's financial sector. Milan prosecutors are investigating allegations that key financial regulators, including Consob, the European Central Bank, and IVASS, were not notified of coordinated actions involving MPS and its major investors during the Mediobanca bid, raising concerns about potential market manipulation and regulatory obstruction. Shares of MPS, which received a state bailout in 2017, dropped 4.6% following the news. Key shareholders Francesco Gaetano Caltagirone and Delfin, representing Italy's Del Vecchio family, who also supported the MPS bid, both stated they acted in compliance with all applicable laws and regulations. They expressed confidence that the investigation would prove the accusations unfounded. MPS had announced its intention to acquire Mediobanca in January, following the Italian Treasury's divestment of its majority stake in the bank. ($1 = 0.8631 euros) Reporting by Alvise Armellini, Gianluca Semeraro and Angelo Amante, editing by Alvise Armellini, Valentina Za, Gavin Jones, Deepa Babington, Rod Nickel. Our Standards: The Thomson Reuters Trust Principles.