The mayors of Milan and Brescia have voiced their support for the proposed project to combine the operations of Italian utilities AEM and ASM Brescia.

If the plan goes ahead, it would provide a notable jump in terms of size and critical mass for both AEM and ASM Brescia, permitting significant growth, Letizia Moratti, Milan’s mayor, told the Financial Times.

In addition to boosting the operations of each company, the deal could also trigger a wave of consolidation in the Italian power sector. Indeed, with a number of municipal firms appearing keen to respond to the Italian government’s call for a ‘super-utility’ to be created in northern Italy, it seems a flurry of merger activity could be set to follow the AEM/ASM Brescia deal.

However, before the agreement can be finalized, a joint business plan will be drafted. This is expected to be ready by the end of 2006, AGI reports. In addition, the mayors of Milan and Brescia will select a third-party advisor to work with advisors appointed by AEM and ASM Brescia, and both regional and national assessments will be conducted.