Italy's biggest bank Unicredit, and Capitalia bank are merging to become the biggest bank in the eurozone. The boards of the two Italian banks have given the go-ahead, and the deal is expected to be approved by shareholders by the end of July or the beginning of August and come into force in the fourth quarter of 2007. Unicredit will absorb competitor Capitalia by exchange of shares, for 1.12 of a Unicredit share for each Capitalia share. The new banking giant hopes to make €1.2 bn in cost savings through the merger by 2010. The cost of the restructuring is estimated at €1.1 bn. The new company's leading shareholders include Verona savings bank (3.9%) and German insurance company Munich Re (3.7%).