Italy's Biggest Bank Takes Shape as Intesa and Sanpaolo Announce Merger

Rome - Banca Intesa SpA and Sanpaolo IMI SpA have agreed to merge, creating Italy's biggest bank in a move hailed as a sign of vitality in the economy. The new group will have about $650 billion in combined assets and a market capitalization of more than $76.6 billion. The merger is expected to be completed by early 2007 and the new group will be based in Turin in northern Italy.

Key Takeaways:

• The merged bank will have a market capitalization of more than $76.6 billion and $650 billion in combined assets.
• The new bank is expected to have a 20 percent market share in Italy.
• Annual net growth is expected to be around 13 percent up to 2009.
• The merger is expected to be completed by early 2007.
• The new group will be based in Turin, Italy.
• Banca Intesa Chairman Giovanni Bazoli will serve as the supervisory board chair.
• Sanpaolo Chairman Enrico Salza will head up the management board.
• Corrado Passera, Intesa's Chief Executive, will serve as the new bank's CEO.
• The merged bank will have to trim its combined operations by up to 10 percent to avoid duplication.
• Analysts expect the banks will have to address union concerns regarding potential job cuts.
• Under terms of the deal, 3.115 Intesa shares will be offered for every Sanpaolo share.
• The merger was approved by the boards of both lenders in separate meetings.

Statistics:

• The merged bank will have a market capitalization of more than $76.6 billion.
• The new bank will have $650 billion in combined assets.
• Annual net growth is expected to be around 13 percent up to 2009.

Sources:

• The Associated Press, cited in the original story.
• Banca Intesa SpA and Sanpaolo IMI SpA, cited in the original story.