Intesa Sanpaolo raised the cash portion of its offer for Monte dei Paschi di Siena on Saturday, adding roughly €800 million to a takeover proposal that has become a referendum on how Italy’s banking system should consolidate.

The revised bid would give MPS shareholders €1.25 in cash, up from €1, for every share they tender, while preserving the exchange ratio of 1.6 newly issued Intesa shares for each MPS share. Reuters reported the sweetener at about €800 million, or $900 million. Intesa’s official transaction page, updated Oct. 3, lists the increase alongside its formal offer documents.

The move turns up the pressure before an Oct. 29 MPS shareholder vote on management’s competing strategy. Chief Executive Luigi Lovaglio wants MPS to pursue separate all-share offers for Banco BPM and wealth manager Banca Generali. Intesa says approval of either transaction would trigger conditions attached to its own bid, and the bank has signaled it would not waive those conditions. Put plainly, shareholders are being asked to choose between selling MPS to Italy’s largest bank and backing MPS as a consolidator in its own right.

A higher price, but the same strategic contest

Intesa launched the unsolicited offer in June with 1.6 shares plus €1 in cash for each MPS share. At announcement, Intesa valued the transaction at €30.6 billion and said the combination would serve more than 27 million clients and hold roughly €1.7 trillion in customer financial assets. Its original offer summary projected €2.9 billion in annual pretax synergies by 2029, split between cost savings and revenue gains, against about €2.1 billion in integration charges.

The higher cash component does not change that underlying pitch. Intesa still argues that absorbing MPS would accelerate its wealth-management strategy and increase earnings and capital distributions per share. It has also proposed selling a stand-alone bank containing the MPS brand and roughly 635 branches to insurer Unipol, an attempt to reduce concentration concerns while retaining Mediobanca, about 625 MPS branches and selected activities.

MPS offers shareholders a different path. Its official press-release archive documents the exchange offers for Banco BPM and Banca Generali announced in August and September. Together, those proposed acquisitions would expand MPS across retail banking and wealth management, but they would also require shareholder and regulatory approvals and expose the bank to the execution risks of two major transactions.

That makes Intesa’s extra cash more than a conventional price bump. It is a direct effort to raise the immediate cost of choosing Lovaglio’s plan. The bid’s estimated value has risen with market prices to about €34 billion, according to Reuters, making it the largest transaction in a two-year wave of Italian bank deals.

The headline value is not a fixed all-cash price. Most of the consideration remains Intesa stock, so the amount MPS holders ultimately receive will move with Intesa’s share price until the exchange is completed. The added €0.25 per share is the more certain part of the revision, but it does not remove market risk or guarantee that the offer closes. Shareholders must weigh that mix against the uncertain future value, financing needs and integration demands of MPS’s two proposed acquisitions.

Regulators remain a separate hurdle

Even a favorable shareholder outcome would not settle the takeover. The Italian Competition Authority opened an investigation in September to examine the deal’s effects across local and national banking and insurance markets. The regulator cited the scale of the companies and the breadth of the affected markets; it has not reached a final conclusion.

The competition review matters because the proposed branch sale may not address every concern. Intesa would emerge with extensive retail, commercial-banking and wealth-management operations, while its inherited stake in insurer Generali could create additional governance and competitive questions. The investigation is therefore about more than branch overlap. It also reaches the structure of Italy’s savings, insurance and advisory businesses.

For investors, the next milestones are unusually clear. MPS shareholders vote Oct. 29 on the Banco BPM and Banca Generali offers. If they approve either, Intesa says the conditions for its own bid would not be met. If they reject both, the richer Intesa offer gains a cleaner route, although regulatory reviews and the minimum acceptance threshold would still matter.

Why the fight matters beyond Italy

Europe’s banks have spent years under pressure to gain scale while preserving competition and local lending capacity. Higher interest rates initially lifted net interest income, but rising funding costs, technology spending and slower economic growth have renewed the appeal of consolidation. The Intesa-MPS fight shows the tension at the center of that strategy: larger institutions can spread technology and compliance costs across more customers, yet they can also reduce choice and concentrate financial power.

The sweetened offer does not resolve those tradeoffs. It sharpens them by attaching a higher immediate price to one route and a firm deadline to the other. Until the Oct. 29 vote and the competition review are complete, the outcome remains contingent. What changed Saturday is the economic pressure on MPS shareholders—and the likelihood that their decision will shape Italy’s banking map for years.