Italian bank UniCredit and smaller rival Capitalia look poised to create Europe's second-largest bank worth around $135 billion after confirming they are in merger talks. The two lenders confirmed a potential tie-up was in the works late on Tuesday after speculation over a deal gathered momentum over the past week and sent Capitalia shares surging to their highest since the bank was formed in 2002.
No agreement has yet been reached, Capitalia said, but sources familiar with the situation told Reuters they expect a deal as early as next week. Analysts expect a friendly, all-share offer from UniCredit.
Adding further momentum to the speculation, the core group of investors that controls 31 percent of Capitalia has convened a meeting for Monday before a Capitalia board meeting on the same day, shareholder-pact sources said on Wednesday. In Milan, several UniCredit board members were seen entering UniCredit's headquarters although the bank has not given any indication of a possible board meeting.
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