Italy's largest bank, Intesa Sanpaolo, launched a mega 31-billion-euro ($35 billion) bid on Monday for rival Monte dei Paschi di Siena (MPS), kicking off a new round of consolidation in the country's banking sector.
Intesa said its proposal would create the second-largest bank in the eurozone by market value, with a network of 3,000 branches.
"The financial and banking sector, both at the Italian and European level, requires a consolidation process that creates large-scale projects capable of supporting the necessary investments," Intesa said.
Larger banking groups can "compete with new players and maintain adequate levels of profitability in an increasingly integrated market," it added.
Intesa's bid is also a direct challenge to Banco BPM, which on Sunday said it would invite MPS to discuss a potential "merger of equals" to create Italy's second-biggest bank.
BPM said the combined company would be worth "more than EUR50 billion" ($58 billion) and constitute "a new national champion."
MPS recently formed the country's third-biggest banking group after buying Mediobanca last year.
