• Norm against hostile takeovers eroded with four attempts in 13 months
• Just two bank bids initially considered hostile successful in last 25 years

Hostile bids for European banks have made a comeback after a five-year hiatus following Intesa Sanpaolo’s EUR 3.9bn equity value takeover of UBI Banca in 2020.

There are currently four active takeover situations where there was an initially adverse reaction from the target’s board, according to Mergermarket data, including some of the largest deals announced in Europe year-to-date.

And the floodgates to banking M&A could be set to open if just one of these deals can make it over the line, Paolo Sersale, Clifford Chance managing partner for Italy, told Dealspeak EMEA.

“Although there is still a lot of political resistance, market pressure for the consolidation of Europe’s banks to achieve size and synergies is increasing,” according to Sersale.

Other deals would be likely to follow “as soon as one hostile takeover goes through”, he added.

“There used to be an unwritten rule against hostile takeovers of banks, but as we see more, it gets harder for [national] regulators to stop them all, particularly if the market wants to see consolidation,” Sersale said.

The track record for successful bids that were initially considered hostile by the target bank’s board in Europe is poor.

There have only been two so far since the turn of the century, according to Mergermarket data: the EUR 70bn cross-border break-up of ABN Amro by a consortium led by Royal Bank of Scotland (RBS), announced in 2007, and Intesa’s acquisition of UBI Banca in 2020.

The taboo against pursuing hostile bids has started to be disregarded over the past year or so, facilitated by a more harmonised regulatory framework and increasing arguments for consolidation in a fragmented European banking sector.

That has prompted a boost in banking M&A attempts and seen the broader financial services sector become one of the busiest for dealmaking in Europe during 2025.

European financial services M&A deals worth EUR 59bn were either announced or completed in the year through 15 June, up almost a third on the same period in 2024.

But some of the largest of these deals are offers currently seen as hostile by the targets’ boards, meaning they have an uncertain route to completion.

The first of the recent crop of hostile bids was announced in May 2024 when BBVA tabled an all-share bid for smaller rival Banco Sabadell in Spain. It was worth an equity value of EUR 11.1bn on announcement.

The deal has been cleared by the country’s competition authority but is pending government approval in a politically hostile environment.

Then, in November 2024, UniCredit made a EUR 10bn equity value all-share offer for domestic rival Banco BPM, which has also yet to complete.

UniCredit CEO Andrea Orcel has said that the deal currently has just a 20% chance of success given the national government’s willingness to use its “golden power” rules to stymie the transaction.

There have been two further hostile attempts during 2025 in Italy.

In January, Banca Monte dei Paschi di Siena (BPMS) launched an unsolicited bid for larger peer Mediobanca, worth EUR 13.2bn on announcement, which the target has described as hostile. The proposed tie-up is the year’s largest formally launched transaction in Europe to-date.

In February, BPER made an unsolicited EUR 4.3bn equity value bid for Banca Popolare di Sondrio (BPS), saying that its intentions should not be considered hostile. The target’s board, however, has described the BPER bid as unsolicited and said there were no discussions between the two banks’ boards ahead of the offer announcement.

The acceptance period runs to 11 July with BPS’s board yet to outline its official recommendation to shareholders.

Chinese, US banks have size advantage

Although European politicians often dislike the idea of storied institutions with strong local roots being absorbed into larger groups, the case for megadeals is clear: BNP Paribas and Credit Agricole of France are the only banks from the European Union (EU) in the top ten of the world’s largest banks by assets, ranking eighth and tenth respectively.

HSBC, which is headquartered in the UK, also makes the list in seventh place.

The top four banks in the world by assets are Chinese, followed by two from the US, and one from Japan.

“The dimensional gap and the performance gap with the US are becoming significant, while technology and innovation creates additional pressures,” Sersale of Clifford Chance said.

The quest for larger European banking institutions and cross-border deals in the region reached its peak with the break-up of ABN Amro in 2008 following the RBS consortium’s acquisition of the bank, in a deal worth some EUR 70bn.

However, the global financial crisis, which began in the same year, swiftly put an end to that impulse. Politicians and regulators emphasised the need for stress tests and strong, nationally ring-fenced capital ratios in the aftermath, which removed some of the rationale for cross-border deals.

Since then, European regulations – the Capital Requirements Directive (CRD) and the Capital Requirements Regulation (CRR) – have aimed to provide a level playing field across the EU’s member states, facilitating both cross-border banking and bank consolidation.

Under the European Banking Union, the Single Supervisory Mechanism (SSM) through the European Central Bank (ECB), should also facilitate deals by reducing the impact of national political bias.

But, while European regulators have been encouraging and supporting bank consolidation, there has been resistance at the national level.

BBVA’s ongoing hostile bid for Banco Sabdell has been approved by the ECB but Spain’s government has been vocally opposed to the deal as it seeks to maintain the support of political allies.

Looking at financial services more broadly, though, the market should already be seen as “profoundly European,” according to Thomas Krecek, partner and co-head of the Clifford Chance corporate practice for Europe.

“The largest banks have a certain core and cultural heritage, but they already act as European institutions,” he said.

There has already been pan-European consolidation within financial services, particularly among smaller banks and in adjacent areas like wealth management.

For example, Austria-based Erste Bank agreed to pay PLN 29.2bn (EUR 6.7bn) to acquire a 49% stake in Santander’s banking subsidiary in Poland earlier this year.

In March, France-based Credit Mutuel Alliance Federale announced its acquisition of German bank Oldenburgische Landesbank (OLB) in a friendly deal.

 If any of the four hostile bids currently on the table find a way to the finishing line, what other banks could be next?

Commerzbank is clearly a name to watch after UniCredit built a 9.5% stake in the Frankfurt-based lender, with an option to acquire an additional 18.5% via derivatives.

It is well documented that politicians in Germany as well as Commerzbank’s board are opposed to a deal, and UniCredit CEO Orcel has also recently being playing down the prospects of a deal.

Even if that deal fails to materialise, there are a large number of potential domestic and cross-border combinations within the EU.

If the perceived risk profile of hostile bids for European banks changes significantly in the months ahead, dealmakers from advisory firms’ financial institutions groups (FIG) will be able to dust off playbooks on cross-border combinations which have been off the table for a decade or more.