Two Italian banks to merge in stock deal

MILAN, Italy, Nov. 14 (UPI) -- Italy's Banche Popolari Unite Scpa will buy domestic rival Banca Lombarda e Piemontese SpA for $7.88 billion as Europe's banking sector consolidates.

The all-stock deal, which is expected to be approved by the Bank of Italy, will create the nation's fourth-largest banking group with 1,970 branches, a 6.3-percent market share and about 4 million retail customers, the companies said Tuesday in a news release.

Upon closing, BPU shareholders will own 54 percent of the resulting entity and BLP shareholders will hold the remainder. Layoffs are planned.

BPU was advised by Banca Leonardo and by Morgan Stanley and BLP was advised by Mediobanca and Rothschild.