• UniCredit on Monday offered to snap up its domestic rival Banco BPM for roughly 10 billion euros ($10.5 billion).
• The deal would, if completed, merge two of Italy's largest lenders.
• It follows a flurry of banking M&A news in Europe. In September, UniCredit increased its stake in Commerzbank to around 21% and submitted a request to boost the holding to up to 29.9%.

Italian lender UniCredit on Monday offered to snap up its domestic rival Banco BPM for roughly 10 billion euros ($10.5 billion) in a move it says is separate from its pursuit of German bank Commerzbank.

The deal would, if completed, merge two of Italy's largest lenders. UniCredit said in a statement early Monday that it is offering 6.657 euros for each share — a slight premium on Friday's close price of 6.644 euros.

UniCredit said the purchase, which would be an all-stock deal, would allow the bank to "further strengthen its role as a leading pan-European banking group."

Shares of UniCredit were down 1.7% on Monday in early deals, while Banco BPM soared 5%.

The news follows a flurry of merger and acquisition announcements in the European banking sector this year. The industry has been considered ripe for consolidation for years, with cash-rich UniCredit often cited as a possible acquirer.

In September, UniCredit increased its stake in German lender Commerzbank to around 21% and submitted a request to boost the holding to up to 29.9%. Earlier that month, the Italian bank had taken a 9% stake in Commerzbank, with half of this shareholding acquired from the German government.

The German government has yet to bless the potential union, with Chancellor Olaf Scholz stating that "unfriendly attacks, hostile takeovers are not a good thing for banks," in late-September comments carried by Reuters.

The largest shareholder of Commerzbank, the Berlin administration, retains a 12% stake after rescuing the lender during the 2008 financial crisis and divesting 4.5% of its initial position in early September. Commerzbank shares slipped 6% on Monday.

"It's definitely a surprise," Kian Abouhossein, head of European bank equity research and global IB coverage at JP Morgan, told CNBC's "Squawk Box Europe."

"It's unlikely that he [UniCredit CEO Andrea Orcel] can do both transactions at the same time. So that sends a message that maybe Commerzbank is a bit more difficult than originally expected."

Earlier this month, meanwhile, Banco BPM itself made a bid for asset manager Anima in a possible 1.6-billion-euro deal, and just days later bought a 5% chunk of state-owned Monte dei Paschi di Siena (MPS).

UniCredit on Nov. 6 posted an 8% year-on-year hike in quarterly net profit to 2.5 billion euros ($2.25 billion), compared with a Reuters-reported 2.27-billion-euro forecast. It also raised its full-year net profit guidance to above 9 billion euros, from a previous outlook of 8.5 billion euros. Shares are up some 55% so far this year.

Abouhossein said that even if the Commerzbank and Banco BPM deals were staggered by, for example, nine months, this would still be an unrealistic timeframe for the transactions.

"You have to also remember, from a regulatory perspective, there's a lot of execution risk and the regulator will look at the size of the bank, operational risk, and management's ability to integrate two banks at the same time," he said. "So I think he's [Orcel] hedging himself a bit on these transactions."

—CNBC's April Roach and Ruxandra Iordache contributed to this article.

Correction: This story has been updated to reflect the correct spelling of Banco BPM.