The London Stock Exchange (LSE) has announced that it is in advanced merger talks with Italy's leading bourse.
A statement from the LSE confirming the discussions comes amid interest from the combined New York Stock Exchange and Euronext.
An announcement from Borsa Italiana's chief executive Massimo Capuano is expected to later prove commentators' predictions correct that the Milan-based exchange favours an all-European tie-up.
"Further to recent press speculation, London Stock Exchange group plc confirms that it is in discussions with Borsa Italiana to establish whether a merger of the two businesses can be agreed," an LSE statement said.
"The board of London Stock Exchange group plc will make a further announcement as appropriate."
A separate bid for the Milan-based exchange is also anticipated from Deutsche Borse after Borsa Italiana revealed it was actively looking for partners.
Last month America's Nasdaq bought out Swedish bourse OMX for $3.7 billion (£1.8 billion) as global exchanges continued their policy of consolidation.
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