Italian banking giant UniCredit is reportedly planning a merger with its French rival Societe Generale (SocGen).

The Financial Times said sources familiar with the development told the publication that UniCredit chief executive Jean-Pierre Mustier, who previously served as head of SocGen’s investment banking arm, has been developing the idea for several months now.

However, no formal approach has been made.

SocGen directors are also exploring the possibility of the merger, the sources told the Financial Times.

Currently, the planning is in the initial stages as the Italy’s tense political scenario is said to have delayed the time frame of the deal from an original plan of 18 months.

In a statement to news agency Reuters, SocGen, refuted the claims stating that there has been no board decision on the prospective merger with UniCredit.

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On the other hand, UniCredit declined to comment on the merger report.

Last year, UniCredit also considered a possible merger with Germany’s Commerzbank.

In November last year, SocGen chief executive Frederic Oudea expressed doubt over cross-border bank deals in Europe in the upcoming quarters.

As of last week, UniCredit and SocGen were valued around €33bn and €32bn, respectively.

The merger, if successful, will lead to further consolidations in the European banking sector, the Financial Times said.