Credit Agricole has bought a 9.2% stake in Italy’s third-largest lender Banco BPM, the French bank said late on Thursday, increasing exposure to its biggest foreign market.

Banco BPM has long been searching for a merger partner in Italy’s consolidating banking sector and it held talks with Credit Agricole back in 2020 which led nowhere. The French lender said it had not requested supervisory approval to cross a 10% threshold in Banco BPM’s share capital.

A strong presence in Italy’s wealthy Lombardy region had made Banco BPM an attractive target for bigger rival UniCredit, which had readied a takeover offer before Russia’s invasion of Ukraine, sources had told Reuters.

After losing nearly a fifth of its value since the start of the conflict, Banco BPM has a market capitalisation of just over 4 billion euros ($4.3 billion), giving the Credit Agricole stake a value of around 380 million euros.

Shares in Banco BPM failed to start trading at the open in Milan on Friday but were indicated up around 10%. Credit Agricole was little changed.

The French lender said the investment, carried out by buying shares on the market and through a transaction with a leading international bank, would have negligible impact on its core capital ratio.

Tied to Banco BPM by a long-standing consumer finance joint venture, Credit Agricole said the deal strengthened what it called the two banks’ “solid relationship”, adding it aimed to expand the scope of their strategic partnerships.

It also shows its appreciation of Banco BPM’s “solid franchise”, good financial prospects and “strong and performing management team”, it said.

Credit Agricole’s Italian business dates back to 2007. Ten years later it took over three small failing banks for 130 million euros, while in 2016 its asset manager Amundi bought Pioneer Investments from UniCredit for 3.6 billion euros.

In recent months it considered a bid for ailing Genoa-based lender Carige, after spending $1 billion euros last year to take over northern bank Credito Valtellinese.

Banco BPM separately said the stake purchase had not been previously agreed between the two banks.

“The quality and importance of the investor, as well as the appreciation it expressed for our bank … represent a clear acknowledgement of the value and potential of Banco BPM,” the Italian bank said.