Italian banking groups Banche Popolari Unite and Banca Lombardo have had their proposed merger approved by both banks' boards, to take effect in April 2007.
Banche Popolari Unite (BPU) will offer a swap rate of 0.83 of new ordinary shares for each Banca Lombardo ordinary share. A proposed dividend of E0.80 per share will be received by shareholders.
Forecasts have indicated that the the transaction will be accretive for Banca Lombardo shareholders from 2007 and for BPU shareholders from 2009.
The new banking group will have a new market capital of E13.5 billion and will become one of the largest banking corporations in Italy, with a network of 1,970 branches and over four million customers.
Targets for the new financial institution include a net profit of more than E1.4 billion by 2009 and for the dividend policy to be no lower than the current policy of BPU.