Investing.com — Banca Monte dei Paschi di Siena SpA  (BIT:BMPS)is reportedly assessing the possibility of buying full or partial control of Mediobanca SpA (OTC:MDIBY), Bloomberg News reported on Friday, citing people with knowledge of the matter.

The announcement might be made as soon as Friday, but negotiations are still underway. No final decision has been reached, the report said.

Monte Paschi’s stock price has doubled in the past year, reaching a market capitalization of about €8.8 billion.

Mediobanca’s stock has risen 28% in the past year, reaching a market value of about €12.7 billion. 

A large part of this value comes from its €6 billion investment in the Italian insurance company Generali (BIT:GASI) SpA, based on current market prices.

While Monte Paschi is considering a move, Mediobanca may resist any such proposal, insiders suggested, with the possibility of counterstrategies being explored.

If finalized, this deal would mark another consolidation effort within Italy’s financial sector, the report said. 

Similar moves include Banco BPM SpA’s November bid for asset manager Anima Holding SpA (BIT:ANIM), as well as UniCredit SpA’s pursuit of both Banco BPM and Germany-based Commerzbank AG (OTC:CRZBY).

The Italian government, which currently holds an 11.7% stake in Monte Paschi after reducing its majority control 18 months ago, has been positioning the bank for privatization. 

A recent sale of Monte Paschi shares was viewed as part of a broader strategy to establish a third major lender in Italy.

Monte Paschi’s growing shareholder base could play a key role in shaping any potential deal. Delfin Sarl, the family holding company of the late billionaire Leonardo Del Vecchio, recently increased its stake in Monte Paschi to 9.8%, the report added. 

Delfin is also the largest shareholder in Mediobanca. Meanwhile, Francesco Gaetano Caltagirone, an Italian construction magnate and Mediobanca’s second-largest shareholder, recently raised his interest in Monte Paschi to 5%.

Founded in 1472 and recognized as the world’s oldest operational bank, Monte Paschi has weathered numerous challenges, including a 2009 bailout following substantial losses from loans and derivatives. Under CEO Luigi Lovaglio, the bank has recently shown signs of recovery, aided by rising eurozone interest rates.

Mediobanca, headquartered in Milan and led by CEO Alberto Nagel, has historically resisted shareholder attempts to replace its leadership. Nagel remains at the helm despite past opposition from Del Vecchio and Caltagirone.