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The long-awaited marriages involving Italy's big banks may finally be at hand.

Banca Intesa SpA and Sanpaolo IMI SpA called separate board meetings for tomorrow to discuss a possible merger of two banks with a total market value of more than ?0 billion, or about $65 billion, potentially accelerating the consolidation of the country's lucrative but fragmented banking sector.

A tie-up between Italy's No. 2 and No. 3 banks by market capitalization, after Unicredito SpA, would redraw the Italian banking map and create the country's largest retail bank by number of branches. It also could open further expansion possibilities in Italy to foreign banks.

Italy, where banking fees are among the highest in Europe, is one of the most attractive markets on the Continent for foreign banks. The country's new top banking regulator, Bank of Italy Gov. Mario Draghi, has been trying to open the sector to foreign investment while simultaneously urging Italian banks to undertake domestic consolidation. A marriage between two of the country's top banks could provide momentum for smaller Italian banks to search for partners as well.

An Intesa-Sanpaolo alliance would create Europe's 13th-biggest bank, with the size necessary to compete with large European rivals, though it would remain heavily dependent on the underperforming Italian economy.

Representatives of the two banks said a merger would bring synergies in corporate and investment banking, and particularly in money management. In January, Intesa sold its share of Nextra, its asset-management portfolio, to French lender Cr¨¦dit Agricole SA, which owns nearly 18% of Intesa. A merger would allow Intesa to offer Sanpaolo's asset-management products through its branch network.

However, Intesa, based in Milan, and Sanpaolo, based in Turin, would have considerable overlap in merging their lucrative retail operations, both of which are concentrated in Italy's wealthy north.

"Bottom line, the deal is positive," said Marcello Zanardo of Keefe, Bruyette & Woods, saying he expects shareholders to approve the merger. "You're looking at synergies worth" more than a billion euros, he said.

Sanpaolo shares rose 6.1% to close at ?5.56 ($19.91) in Milan, while Intesa rose 7.6% to close at ?.03.

An Intesa-Sanpaolo tie-up also could open up opportunities for foreign banks to make offers for other Italian lenders, such as Capitalia SpA, Italy's fourth-largest bank. The Rome-based bank's shares have risen 31% this year partially on speculation that it would be taken over soon. Intesa and Sanpaolo had been considered potential partners for Capitalia. But the absence of an Italian suitor for Capitalia could open the way for foreign buyers.

Italian bank Monte dei Paschi di Siena SpA, Italy's No. 6 bank, also has seen its shares rise 31% this year based in part on it being a takeover target.

Romano Prodi, Italy's prime minister, welcomed the potential Intesa-Sanpaolo merger as an opportunity to create a national champion big enough to play an active role in European banking consolidation. "Instead of always being the 'prey,' I'd like, once in a while, to also be the predator," he said.

Italy's banking sector has been among the most turbulent in Europe recently and some expansion attempts from foreign banks have run into trouble.

Last year the European Union complained that the Bank of Italy's then-governor, Antonio Fazio, was using his regulatory authority to hamper foreign banks from taking over Italian lenders. Mr. Fazio later resigned after Italian prosecutors began investigating him for insider trading and other securities violations for allegedly attempting to obstruct a bid by ABN Amro Holding NV for midsize Italian lender Banca Antonveneta SpA. Mr. Fazio denies the allegations.

The affair tarnished the Italian banking sector and raised questions about regulatory transparency.

Since Mr. Draghi took over the Bank of Italy this year, he has worked to create greater regulatory transparency and remove hurdles to foreign takeovers. So far this year, ABN Amro completed its takeover, and another Italian bank, Banca Nazionale del Lavoro SpA, was bought by French bank BNP Paribas SA.

Another factor driving change in the Italian sector was Unicredito's takeover last year of a Germany-based bank, HVB Group AG. The combination turned Unicredito into a major European banking power and made it the leader in the fast-growing Eastern European market.

The deal also put pressure on Intesa and Sanpaolo, Unicredito's Italian rivals, to make moves to increase their own scale and reach. However, some analysts were skeptical about whether an Intesa-Sanpaolo deal would create significant value, casting the potential merger as a defensive move aimed at keeping Italy's top banks out of foreign hands and questioning whether it could produce significant synergies and opportunities for foreign expansion.

"They're building a fortress," said Armin Polster, a banking analyst with Deutsche Bank. Creating synergies in their retail operations, he said, would require staff reductions that could be politically difficult in Italy.

It is also unclear how the major shareholders of the two banks would react to a deal. A deal between Sanpaolo and Intesa could encounter resistance from Credit Agricole. The French bank's 18% stake makes it the largest player by far within the shareholder pact -- the group of shareholders who joined up to control Intesa.

That essentially gives Credit Agricole veto power over any potential deal. Although Credit Agricole has expressed support for Intesa's effort to grow, analysts say Credit Agricole is keen on expanding further in Italy and doesn't want to see its stake diluted by a merger.

Intesa Chairman Giovanni Bazoli indicated Thursday that Credit Agricole already had given its approval to the deal. Speaking at a conference in Rimini, Italy, he added that while the size of the French bank's future stake hadn't been determined, Credit Agricole "will not increase its presence."

Louise Tingstrom, a Credit Agricole spokeswoman, declined to say whether the bank would accept a dilution of its stake, but said the bank would "examine in detail any formal proposal put forward and subsequently act in the best interest of all stakeholders."

A spokesman for Banco Santander Central Hispano SA, which owns a stake of about 8.5% in Sanpaolo, declined to comment on the potential merger talks. The Spanish bank has three representatives on the 17-member Sanpaolo board.