Credit Agricole’s bid to acquire Creval gets nod from Italy

Italy has reportedly given the approval for French lender Credit Agricole’s bid to take over small lender Credito Valtellinese (Creval).

The French lender’s Italian subsidiary made this bid in November last year offering €10.50 per share to buy Creval for €737m.

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But Creval termed that offer as too low and sought a higher acquisition bid from Credit Agricole.

Credit Agricole’s Italian division waited for an approval from the Rome government, which holds the ‘golden power’ to restrict any unwanted investments in the country’s strategic sectors like banking, telecom and health.

However, the Treasury recommended that the power should not be used in the case of Creval.

The recently sworn-in prime minister of Italy Mario Draghi was made responsible for the case. Mario, the former president of the European Central Bank, agreed to adhere to the Treasury’s recommendation, stated the report.

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The deal slated to launch by April will reportedly benefit from tax breaks for mergers, which were announced last year. The deal has the potential to secure a €350m benefit from the tax break incentives, reported Reuters.

Creval has already expressed its concerns over the current bid terming it as low and continues its search for alternatives.

According to current market prices, the value of Creval stands at €846m.

Creval says it will give a formal opinion on the Credit Agricole bid only after the publication of the offer’s official prospectus.

The potential merger of Credit Agricole Italia and Creval would lead to the creation of the sixth-largest retail bank in Italy with an asset value of €100bn.