The London Stock Exchange (LSE.L) is to buy its Italian counterpart for 1.6 billion euros ($2.15 billion), a statement from the two confirmed on Saturday, the latest step in a global consolidation of exchanges. The pair said they planned to become "the world`s capital market" and that together they accounted for 48 percent of the FTSE Eurofirst 100 index of companies by market value. They would also be Europe`s leading market for electronic trading of Exchange Traded Funds and securitized derivatives, and Europe`s leading fixed income market thanks to Borsa`s interest in the MTS platform. Analysts see the deal, flagged last week by sources familiar with the proposal, as largely defensive by the LSE, which has faced repeated takeover attempts as the world`s exchanges respond to competitive pressures and globalized trading opportunities. A joint statement said the transaction would be "earnings neutral to positive in (financial year) 2008 and earnings accretive by at least 10 percent in (financial year) 2009." They said the deal would lead to annual revenue synergies of 29 million euros in financial year 2011, along with cost synergies and savings of about 29 million euros a year. Borsa Italiana`s board backed the takeover at a board meeting on Friday, and the LSE said on Saturday it was confident enough of its shareholders would back the deal. Borsa Italiana, which had 16.23 billion shares in issue as of March 15, is mainly owned by banks and financial intermediaries. The shareholders will get 4.9 LSE shares for every Borsa share. Its largest shareholders are Unicredito (CRDI.MI), with a 19.9 percent stake, Intesa Sanpaolo (ISP.MI), with 18.7 percent, and Banca Monte dei Paschi di Siena (BMPS.MI), with 10.4 percent.