Intesa Sanpaolo, Italy’s second-largest banking group by assets, is considering a takeover of Generali, Italy’s largest insurer.

The bank confirmed its interest for Generali after press reports on a possible bid were published earlier this week.

According to the note from Intesa published on Tuesday, the bank’s management is currently examining “possible industrial combinations with Assicurazioni Generali.”

“The bank is interested in industrial growth in the areas of asset management, private banking and insurance in synergy with its banking networks, including through possible international partnerships”, the bank said. The possible deal, added the note, is in accordance with Intesa’s 2014-2017 business plan.

It is unclear whether the deal would prompt a merger of Eurizon Capital, Intesa’s asset management business, and Generali Investments Europe. If this was the case, the resulting asset management company would have AUM of around €700bn, placing it among the top 25 global asset managers by assets, based on figures from IPE’s 2016 Top 400 asset management rankings

The press reports prompted a jump in the insurer’s share price of more than 15% since last week. Intesa Sanpaolo’s shares have fallen by about 6% since last Friday.

The companies were summoned by the country’s financial markets authority, Consob, to discuss the rumours, before Intesa confirmed its plans with a note to the market.

They are still to meet the authority this week, together with Unicredit, Italy’s largest bank, which was also said to be considering a bid for Generali.

In what could be seen as a defensive move, on Monday Generali said it had acquired voting rights on Intesa’s shares equivalent to 3.01% of the bank’s share capital through a securities lending transaction. The move could hinder Intesa’s bid due to Italian cross-investment laws.

Italian newspapers reported that Generali, which has seen significant senior management turnover in the past year, may also be the target of European peers AXA and Allianz.

Generali’s management is said to be preparing a response to a possible bid by Intesa. However, just this week the company announced the departure of CFO and general manager Alberto Minali. Following his departure, the group’s head of corporate finance, Luigi Lubelli, was promoted to the CFO role.

Minali had joined in 2012 shortly after the appointment of Mario Greco as CEO. Greco departed last year to join Zurich and was replaced by Frenchman Philippe Donnet. Last month, the company also saw the departure of CIO Nikhil Srinivasan.

It is speculated that a possible combination between Intesa and Generali would see the partial breakup of the insurance group. Intesa is said to be particularly interested in Generali’s fee-earning asset management business. Generali’s overseas insurance businesses in France, Austria and Germany may be sold to local competitors.

A deal would face pressure not only from Intesa’s and Generali’s shareholders, but also from regulators. Italian and European antitrust authorities and the European Central Bank would scrutinise the deal for its potential impact on competition and financial stability.

On the other hand, the involvement of foreign entities such as Axa and Allianz may spark political backlash due to the significance of Generali’s position within the Italian marketplace.   

Meanwhile, shares in Unicredit were up about 14% on Thursday, as investors switched from Intesa to the larger banking group, weighing the benefits and risks of a tie-up between Intesa and Generali.