Exclusive-Credit Agricole discussed terms of possible BPM deal with Italy govt

Group 1 - Credit Agricole is in discussions with the Italian government regarding a potential merger between its Italian unit and Banco BPM [1][2] - The French bank has sought supervisory clearance to increase its stake in Banco BPM to 29.9% and has already raised its holding to just above 20% using derivative contracts [2] - Banco BPM is considering merger options, including a tie-up with Credit Agricole Italy, which is its largest shareholder, or a combination with Monte dei Paschi di Siena [3] Group 2 - The Italian government has special powers to review deals involving strategic national assets, including banks, and has requested guarantees from Credit Agricole to ensure continued credit flow to small businesses, which are key clients of Banco BPM [4] - Additional guarantees are sought regarding Anima Holding, a fund manager acquired by Banco BPM, to protect domestic savings [5] - The Italian Economy Minister has indicated no political objections to a merger with Credit Agricole but emphasized the application of legislation to protect key assets if the deal proceeds [5]