UniCredit said that it will begin exclusive discussions to acquire parts of Banca Monte dei Paschi di Siena (MPS).

The move comes after UniCredit and the Italian Government, the majority shareholder of MPS, approved the prerequisites for a potential transaction.

One of the oldest banks in the world, MPS was bailed out by the government in 2017.

The parties will now begin discussions to assess the feasibility of a potential transaction involving the commercial operations of MPS. The terms of the deal and the scope of the transaction is yet to be determined.

The potential deal will support UniCredit’s growth plans as well as bolster its position in Italy.

In a statement, UniCredit said that MPS may add around 3.9 million clients, €80bn customer loans, €87bn customer deposits to its books, subject to the definition of the final perimeter.

The contribution will also include €62bn assets under management and €42bn assets under custody.

“This would lead to a significant increase in future profitability for the Group, while the prerequisites of the transaction would allow UniCredit to preserve its capital position, improve its asset quality and its risk profile on a pro-forma basis.

“Any potential transaction would take place alongside the Group’s existing focus on unlocking internal value, which remains a current and ongoing priority,” the statement added.

According to a Reuters report, the talks are expected to continue for a few weeks. A decision may be announced in September.