(Bloomberg) — Italy’s Mediobanca SpA approached Assicurazioni Generali SpA about acquiring the insurer’s private banking and wealth management unit before ultimately abandoning the plan, people familiar with the matter said.

The Milan-based investment bank decided that conditions were unfavorable for a bid on Banca Generali SpA, a listed unit of the Italian insurer that has a market value of 3.2 billion euros ($3.8 billion), said the people, asking not to be named as the talks remain private.

Representatives for Generali and Mediobanca declined to comment.

a man wearing a suit and tie: Mediobanca SpA CEO Alberto Nagel Strategy Update News Conference

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Mediobanca SpA CEO Alberto Nagel Strategy Update News Conference

Alberto Nagel


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Photographer: Camilla Cerea/Bloomberg

Mediobanca Chief Executive Officer Alberto Nagel looked at a range of options to pay for the deal, including partially using shares the bank owns in Generali, according to the people. Mediobanca holds about 13% of Trieste, Italy-based Generali.

Nagel, who over the last two years has been looking to pull off a landmark deal at the bank where he’s worked since 1991, was dissuaded by the performance of Generali shares, which have lost about 35% since the beginning of the year, and by market uncertainties in the wake of the coronavirus outbreak, the people said.

Mediobanca fell as much as 1.8% in Milan trading and was down 1.1% at 6.62 euros as of 9:06 a.m. The stock has declined about 34% this year, giving the company a market value of 5.86 billion euros.

Sector Consolidation

Consolidation in the Italian financial industry is already well underway. Lender Intesa Sanpaolo SpA earlier this year announced its planned takeover of Unione di Banche Italiane SpA, while the Italian government reportedly asked UniCredit SpA executives if they’d be interested in buying the state’s majority holding in Banca Monte dei Paschi di Siena SpA.

A purchase of Banca Generali would have fit