CDP opposes Nexi’s sale of majority stake in digital banking unit to TPG

Core Viewpoint - Cassa Depositi e Prestiti (CDP) is opposing Nexi's sale of a majority stake in its digital banking solutions business to private equity firm TPG, viewing the banking-services division as strategically important [1][2]. Group 1: Nexi's Business and Financials - Nexi received a proposal from TPG for several assets within its digital banking division, with TPG offering approximately €1 billion ($1.16 billion) for the assets [2]. - The digital banking division includes Italy's national interbank network, which spans over 200,000 km and is linked to the Bank of Italy for settlement of banking transactions [2]. - The division supplies technology for open banking, corporate banking services, and interbank clearing systems, generating core earnings of €155 million last year [3]. - Nexi's shares are trading just above €4 ($4.6), valuing the company at nearly €5 billion ($5.8 billion), a significant decline from a peak of over €20 billion ($23.15 billion) in July 2021 [3]. Group 2: Strategic Importance and Competitive Landscape - CDP, holding a 19.14% stake in Nexi, is joined by senior Italian officials in opposing the full divestment of Nexi's banking-services division [1]. - Nexi faces competitive pressure from fintech firms and instant payment platforms, which have eroded its market share and compressed margins [3]. Group 3: Related Developments - CDP, along with the Food and Agriculture Organization of the United Nations (FAO) and the EU, is launching the TERRA programme to support lending for agrifood MSMEs in Africa and Türkiye, backed by an EU guarantee of up to €109.5 million [4]. - In March last year, CDP was reported to have backed Italy's fund with an initial investment of €1 billion ($1.09 billion) to support artificial intelligence (AI) initiatives [4].