Milan Mayor Giuseppe Sala has aligned with Mediobanca in an ongoing struggle initiated by state-backed Monte dei Paschi di Siena (MPS), indicating the financial dispute is taking on a more political dimension.
Sala, a former corporate executive, heads a left-wing administration in Italy's financial hub.
MPS's 13.3 billion euro ($13.8 billion) all-share bid for their Milanese competitor has sent ripples through Italian finance by juxtaposing a bank that historically symbolized the country's banking troubles against one of the most esteemed names in the sector.
In a statement to SkyTg24 television, Sala expressed his concerns, It's clear that (the deal) doesn't possess a strategic sense as much as the presence of the government, which is cause for, I don't want to say shock, but concern." He added, "Not long ago we rescued MPS with Italians' money and now we're supporting it in a takeover the rationale of which is hard to see. This can be seen as Rome versus Milan, and this is how it is perceived in Milan.
The bid follows the entrance of Delfin, the holding company of late Luxottica founder Leonardo Del Vecchio, and construction magnate Francesco Gaetano Caltagirone into MPS as shareholders, aligning them with Prime Minister Giorgia Meloni's government.
Delfin and Caltagirone jointly hold 27% of Mediobanca, 15% of MPS, and 17% of insurer Generali.
The state currently retains an 11.7% stake in the Tuscany-based bank, reduced from 68%.
Sala highlighted the complex dynamics by stating, Even a child understands that this is not just about Mediobanca, but Mediobanca and Generali.
The government led by Meloni has shown support for the bid, with Economy Minister Giancarlo Giorgetti citing the potential benefits for Italy's banking system and broader economy.
Despite being a political rival of Sala, Giorgetti's endorsement partly diminishes allegations of a north vs south confrontation, as he belongs to the League party, known for its historic influence across northern Italy.