Italian bank UniCredit said on Monday (Nov 25) it had offered to buy rival Banco BPM in a deal worth about 10.1 billion euros (S$14.2 billion) in shares that would bring together the second and third largest Italian banks and expand their pan-European presence.

UniCredit, the country’s second-largest bank, offered 0.175 of its ordinary shares for each BPM share, equivalent to 6.67 euros per share, a premium of around 0.4 percent to the closing price of the action Friday.

“Europe needs stronger and bigger banks to help it grow its economy and compete with other major economic blocs,” said Andrea Orcel, CEO of UniCredit.

BPM did not immediately respond to a Reuters request for comment.

At the beginning of November, BPM acquired a 5 percent stake in state-owned Monte dei Paschi di Siena and also launched a takeover bid to take full control of asset manager Anima Holding in a deal. a value of up to 1.6 billion euros.

BPM shares are up about 5.3 percent since the close on Nov. 6, before its bid for Anima was announced.

UniCredit said it had taken note of BPM’s offer for Anima and that the offer was independent of its investment in German bank Commerzbank.

The lender said it expects the BPM deal to add to its earnings per share in the high single-digit range within two years of the settlement of the exchange offer. REUTERS