Two share swap offers announced yesterday could lead to the creation of two $300 billion (£214 billion) Italian banks.
Italy's largest bank San Paolo IMI launched a friendly share swap offer for Banca di Roma, a spokesman for the bank said hours after UniCredito Italiano - the third largest bank -launched a $16.4 billion share swap offer for Banca Commerciale Italiana (BCI).
Details of the San Paolo share swap offer were not immediately available and last night San Paolo said a statement was due later. Banca di Roma, whose year-long talks to merge with BCI broke down in acrimony three days ago, had no immediate comment.
If the San Paolo-Roma move comes off it will prevent UniCredito-BCI from ousting San Paolo at the top of Italy's banking league and leave two Italian giants to face the intense competition created by the single European currency.
The UniCredito-BCI move was announced first with the bank saying it would create Italy's largest lender and Europe's fifth largest. "Together (UniCredito and BCI) can give life to one of the largest and most efficient European banking groups," UniCredito said in a statement.
UniCredito said it would offer eight of its own shares for every five in BCI to create the largest bank in the country with assets of $280 billion. It will be renamed "Eurobanca".
The offer values BCI shares at 17.6 per cent above Friday's close of 7.197 euros. UniCredito closed at 5.288 euros.
BCI had no immediate comment, though it is widely seen as open to a merger with UniCredito after saying it was looking at all options in Italy's overcrowded banking sector.
Driven by the euro, low interest rates, foreign competition and new technology, banks across Europe are caught up in a wave of mergers or takeovers. On March 9th, France's BNP launched a $43.6 billion hostile bid for Societe Generale and Paribas, upstaging their plans to merge.
Shares in San Paolo-IMI closed at 15.789 euros on Friday and Banca di Roma at 1.409.
The current merger activity casts a question mark over the future of Mediobanca, the secretive Milanese merchant bank that has choreographed corporate Italy for half a century.
Mediobanca - controlled by UniCredito, BCI and Banca di Roma - called the shots in Italian finance during the years when most commercial banks were government-owned.
But privatisation of Italy's biggest banks and the advent of the euro has eroded its powerful position, and Mediobanca is now talked of as a possible takeover target itself. Its shares leaped 3.9 per cent on Friday to 12.593 euros.
