MPS Bank Investigated Over Mediobanca Acquisition Concerns

Italy’s historic Monte dei Paschi di Siena (MPS) bank and its primary shareholders are facing an investigation in Milan regarding the bank’s acquisition of investment entity Mediobanca. This inquiry examines possible breaches of market regulations during the recent €16 billion ($19 billion) transaction, marking Italy's most substantial banking merger to date.

MPS has acknowledged receipt of allegations against its CEO, Luigi Lovaglio, aged 70, and confirmed its full cooperation with authorities. The bank asserts its confidence in clarifying its actions and trusts the investigative process.

The Mediobanca acquisition, completed last September, received government backing and represents a crucial move amid ongoing mergers transforming Italy's financial sector. Prosecutors in Milan contend that Italy’s market regulator Consob, the European Central Bank (ECB), and the insurance agency IVASS were inadequately informed about collaborative strategies between MPS and its principal shareholders during the bidding phase. The investigation is assessing possible manipulation of the market and hindrance of regulatory bodies.

Following the investigation's announcement, MPS shares dropped by 4.6% at market close. Both the ECB and Consob refrained from commenting immediately.

The principal shareholders of MPS include construction tycoon Francesco Gaetano Caltagirone and the holding company Delfin, led by Francesco Milleri of EssilorLuxottica. These entities were instrumental in backing MPS’s bid and hold considerable stakes in Mediobanca themselves. They had purchased shares in MPS following the Italian Treasury's reduction of its stake during the bank’s re-privatization in November 2024.

The inquiry involving Lovaglio, Caltagirone, and Milleri has been active since June, but its public awareness has surged recently as law enforcement executed searches linked to the case. Delfin and Caltagirone both affirmed they have acted in accordance with legal guidelines and market regulations, vowing continued cooperation.

Sources indicate that MPS’s offices faced searches this week, overseen by Milan prosecutors Roberto Pellicano, Luca Gaglio, and Giovanni Polizzi.

The takeover of Mediobanca occurred promptly after the Italian Treasury decreased its MPS stake from 68% to about 12%, making the acquisition feasible. This investigation brings to light concerns regarding corporate governance and regulatory oversight within Italy’s financial system, capturing the attention of both investors and government officials.

As Italy confronts this significant investigation, the repercussions could substantially influence MPS, its shareholders, and the wider banking and investment climate across Europe.