Italian lender UniCredit said on Monday it had offered to buy rival Banco BPM in a roughly 10.09-billion-euro ($10.57 billion) all-stock deal that would combine Italy's second and third largest banks and expand their pan-European presence.

UniCredit, the country's second-largest bank, offered 0.175 of its common stock for each BPM share, which equates to 6.67 euros per share, a premium of about 0.4% to the stock's closing price on Friday.

"Europe needs stronger, bigger banks to help it develop its economy and help it compete against the other major economic blocs," UniCredit CEO Andrea Orcel said in a statement.

BPM did not immediately respond to a Reuters request for comment.

Earlier in November, BPM bought a 5% stake in state-owned Monte dei Paschi di Siena (MPS) and also launched a buyout offer to gain full control of asset manager Anima Holding in a deal worth up to 1.6 billion euros ($1.7 billion).

BPM's shares have risen about 5.3% since the close on Nov. 6, before it announced its offer for Anima.

UniCredit said it had taken note of BPM's offer for Anima and that its offer is independent of its investment in German lender Commerzbank AG.

The lender said it expects the BPM deal to add to its earnings per share in the high single digit range within two years following the settlement of the exchange offer. ($1 = 0.9542 euros)

(Reporting by Shubham Kalia in Bengaluru; Editing by Abinaya Vijayaraghavan and Savio D'Souza)