MILAN (Reuters) -French bank Credit Agricole said on Thursday it has bought a 9.2% stake in Italy’s third-largest bank, Banco BPM.

Banco BPM has long been searching for a merger partner and held discussions with Credit Agricole back in 2020 which led nowhere. Italy’s No.2 bank UniCredit had also readied a takeover bid for Banco BPM but had to shelve it when Russia invaded Ukraine, sources have told Reuters.

Credit Agricole said the transaction showed its appreciation of Banco BPM’s “solid franchise”, good financial prospects and “strong and performing management team.”

The deal “strengthens the solid relationship with Banco BPM,” the French group said, adding it aimed to expand the scope of its strategic partnerships with Banco BPM, currently centred on consumer finance.

Credit Agricole said it had not requested supervisory approval to cross a 10% threshold.

Banco BPM said in a separate statement Credit Agricole’s 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.

(Reporting by Valentina Za and Andrea Mandala; Editing by Sandra Maler and Richard Pullin)