Crédit Agricole has proposed merging its Italian business with Banco BPM to create Italy’s third-largest banking group. According to Sina Finance, its proposal offers Banco BPM shareholders an all-share deal at a 20% premium to the bank’s year-end valuation, along with a €1 billion special dividend. If completed, the deal would raise Crédit Agricole’s stake in Banco BPM from 29.6% to about 45%. The merged bank would remain listed in Milan, with Banco BPM CEO Giuseppe Castagna staying in the role. Crédit Agricole expects the merger to generate €800 million in synergies, and the deal could be completed in the second half of 2027. The proposal comes after shareholders of Monte dei Paschi di Siena rejected a bid for Banco BPM last month. This summer, Banco BPM abandoned a proposal for a merger of equals with the Tuscany-based bank.