Italy's MPS Bank Faces Investigation Over Mediobanca Takeover

Post by : Saif Nasser

Italy’s Monte dei Paschi di Siena (MPS), one of the country’s oldest banks, and its two largest shareholders are under investigation in Milan over the bank’s recent takeover of investment firm Mediobanca. The probe focuses on potential violations of market rules during the €16 billion ($19 billion) acquisition, Italy’s biggest recent banking deal.

MPS confirmed it has been informed of allegations against CEO Luigi Lovaglio, 70, and said it is cooperating fully with authorities. In a statement, the bank said it is confident it can clarify its actions and expressed full trust in the competent authorities.

The Mediobanca takeover, completed in September, was supported by Italy’s government and marked a major step in a wave of mergers reshaping the country’s banking and financial sector. Milan prosecutors allege that Italy’s market watchdog Consob, the European Central Bank (ECB), and the insurance supervisor IVASS were not properly informed of coordinated actions between MPS and its main investors during the bid. Authorities are investigating potential market rigging and obstruction of regulators.

Following news of the investigation, MPS shares fell 4.6% at the close of trading. Both the ECB and Consob declined immediate comment.

The bank’s largest shareholders are Francesco Gaetano Caltagirone, a construction magnate, and Delfin, the holding company of Italy’s Del Vecchio family, led by EssilorLuxottica CEO Francesco Milleri. Both groups were key supporters of MPS’s bid and also held significant stakes in Mediobanca. They acquired their shares in MPS in November 2024 after the Italian Treasury sold part of its stake during the bank’s re-privatisation.

The investigation into Lovaglio, Caltagirone, and Milleri has been ongoing since June, but the public only became aware recently as prosecutors carried out searches connected to the case. Both Delfin and Caltagirone stated that they acted in full compliance with laws and market regulations and pledged to continue cooperating with authorities.

MPS’s offices were searched this week, according to unnamed sources familiar with the matter. The Milan prosecutors handling the case are Roberto Pellicano, Luca Gaglio, and Giovanni Polizzi.

The takeover of Mediobanca came shortly after the Italian Treasury reduced its stake in MPS from 68% to around 12%, facilitating the bank’s bid. This investigation raises questions about corporate governance and regulatory oversight in Italy’s financial sector and will be closely watched by investors and the government alike.

As Italy navigates this high-profile probe, the outcome could have significant implications for MPS, its shareholders, and the broader banking and investment landscape in Europe.