(Reuters) – Italian banking and insurance group Intesa Sanpaolo is considering a bid for the country’s biggest insurer, Assicurazioni Generali S.p.A., sources said on Tuesday, in what would be among the industry’s biggest deals in Europe.

Intesa is considering a share offer for a majority stake in Generali, which has a market value of €22 billion ($24 billion), the sources said. Intesa, worth almost double that, has the backing of at least two major shareholders for a bid.

Generali is back in the crosshairs due to a recent leadership change and perceived instability of its share register. Political weakness in Rome, which sees it as a strategic asset, has also encouraged bid talk and shares in the 186-year-old company soared on Tuesday.

Other rumored suitors include France’s Axa S.A. and Germany’s Allianz S.E. Generali chief executive Philippe Donnet, hired last year, was formerly an executive of Axa.

Intesa, Generali, Allianz and AXA all declined to comment.

Intesa aims to take control of Generali with a view to reorganizing it and selling some assets abroad, one source said. Intesa is already bigger than Generali in the life insurance business and a bid would attract anti-trust scrutiny.

The sources said Intesa’s two main shareholders -- Compagnia di San Paolo and Fondazione Cariplo -- would tolerate a temporary reduction in dividends to help finance a takeover.

Under Italian rules on cross-shareholdings, Intesa would have to launch an offer for at least 60% of Generali.

On Monday, Generali made sure of that by taking a 3.01% stake in the bank in a pre-emptive strike, effectively robbing Intesa of the option of taking a minority stake.

La Repubblica first reported on Tuesday that Intesa, whose board meets on Friday, was considering a share swap offer for Generali. Generali offered no explanation for its sudden investment in Intesa, which it did by borrowing shares rather than buying them outright.

“The move to acquire a stake of little more than 3% of the share capital of Intesa Sanpaolo has an obvious defensive quality,” said analyst Luca Comi of brokerage Icbpi.

Generali has returned as the subject of takeover speculation since Mr. Donnet was appointed.

Speculation of a deal involving Generali has been kept on the boil by plans by its biggest shareholder, Mediobanca , to reduce its 13% stake as part of a longer-term objective to bolster its capital.

Political uncertainty has also dogged Generali, on the grounds that a weakened Italian government would be less able to defend Generali against a foreign takeover.

Generali owns €70 billion ($75.19 billion) in Italian government debt and is viewed as a strategic asset in Rome.

“Our country could not tolerate the loss of Generali, particularly if you look at assets under management. It would create too strong a competitor for Intesa,” one of the sources told Reuters. “Together, the group would be a formidable one from an industrial point of view.”

Italy’s La Stampa daily has said that Intesa could seek to build a large stake in Generali, possibly as part of a broader deal with Germany’s Allianz, Europe’s biggest insurer ahead of Axa and Generali.

“Our understanding is that Intesa Sanpaolo would have purchased a large stake in Generali only to prevent a takeover or a merger with Axa,” analysts at Mediobanca Securities said.

“In case of an offer coming from the French insurer, we do not rule out a counteroffer potentially being made by Allianz.”