The European Central Bank has authorised Banca Monte dei Paschi di Siena to proceed with its proposed acquisition of Mediobanca, according to statements from the Italian lender and people familiar with the decision. The green light, given by the ECB’s supervisory board and awaiting formal ratification by the governing council, removes the main regulatory hurdle to one of the largest unsolicited bank takeovers in Italy in years. The approval covers scenarios in which Monte Paschi secures either a majority holding or a stake of less than 50% in Mediobanca. Under the decision, the Siena-based bank must submit a detailed integration plan to the ECB within six months of completing the deal, outlining capital, funding, IT and governance arrangements. Should the eventual stake fall below 50%, Monte Paschi is required within three months to demonstrate de-facto control or set out an alternative strategy for its holding. Monte Paschi aims to launch its all-share exchange offer next month. It can count on the backing of prominent Mediobanca investors, including the Del Vecchio and Caltagirone families, who together own about 30% of the target. The Italian Treasury, which retains an 11.7% stake in the bank it rescued in 2017, supports management’s push to expand as industry consolidation accelerates amid falling interest rates.