ROME, Aug. 27--Banca Intesa SpA and Sanpaolo IMI SpA said Saturday they agreed to merge, creating Italy’s biggest bank in what one official hailed as a sign of vitality in the economy.
According to AP, the banks said the new group would have about $650 billion in combined assets and a market capitalization of more than $76.6 billion. The banks said they expect the new group will have a 20 percent market share and show annual net growth of about 13 percent in the period up to 2009.
The merger was expected to be completed by early 2007 and the new group will be based in Turin in northern Italy.
The boards of the two lenders approved the deal in separate meetings.
Banca Intesa Chairman Giovanni Bazoli called the merger a sign of vitality for Italy.
The new bank “will be a point of strength for our country’s economy, and will be able to act as a protagonist on the European scene,“ he said in a statement.
Under terms of the deal, which will be presented to shareholders for approval in December, 3.115 Intesa shares will be offered for every Sanpaolo share.
Intesa’s Chief Executive Corrado Passera will serve as the new bank’s CEO. Bazoli will chair a supervisory board and Sanpaolo Chairman Enrico Salza will head up a management board.
The banks said they expect the new company will have to trim its combined operations by up to 10 percent to avoid duplication. Analysts said the banks will have to address union concerns that the merger would mean job cuts.
Shares of other Italian banks rose at the end of the business week as investors placed bets on whether the Intesa-Sanpaolo tie-up would be the first in a series of deals that could involve foreign buyers and defensive mergers to shut them out.
Premier Romano Prodi and Economics Minister Tommaso Padoa-Schioppa had favored a deal between Intesa and Sanpaolo.
The merger would eclipse Italy’s No. 1 bank, Unicredit, which has about $360 billion in Italian assets. However, adding the Unicredit group’s assets from German and Eastern European operations, its combined assets reaches $960 billion.

China's sharp rise in sulphur dioxide emissions, the main component of acid rain, is ruining croplands and threatening the food chain in rivers and lakes.(AFP File Photo)

BEIJING, Aug. 27--One-third of China’s vast landmass is suffering from acid rain caused by its rapid industrial growth, while local leaders are failing to enforce environmental standards for fear of hurting business, said officials quoted Sunday by state media.
China’s factories spewed out 25.5 million tons of sulphur dioxide--the chemical that causes acid rain--last year, up 27 percent from 2000, said Sheng Huaren, deputy chairman of the Standing Committee of parliament.
Sheng released a report Saturday that found pollution from factories and power plants was rising by 9 percent a year--an embarrassment for a government that promised this year to clean up China’s air. The report said sulphur dioxide emissions were double safe levels.
“Increased sulphur dioxide emissions meant that one-third of China’s territory was affected by acid rain, posing a major threat to soil and food safety,“ Sheng said, according to the Xinhua News Agency.
Environmental protection has become a prominent issue in China following a string of industrial accidents that poisoned major rivers, forcing several cities to shut down their water systems.
Chinese cities are among the world’s smoggiest following two decades of breakneck economic growth. The government says all of China’s major rivers are dangerously polluted. Millions of people lack access to clean drinking water.
On Sunday, local government officials said a tanker carrying 25 tons of caustic soda had fallen Friday into the Xuefeng River in China’s northwest, poisoning a drinking water source for 100,000 people. One person was killed in the accident, Xinhua said.
Officials said the water quality had returned to normal by Sunday after the government dumped 10 tons of hydrochloric acid into the water to neutralize the caustic soda, which is also known as sodium hydroxide.
The government pledged this year to cut air pollution emissions by 10 percent by 2010.
Beijing plans to spend 1.4 trillion yuan (US$175 billion; 140 billion euros) on environmental protection over the next five years, up 60 percent from the previous five years, according to Mao Rupai, chairman of the parliament’s environmental committee.
Mao complained that local officials fail to enforce standards for fear of hurting businesses. He said some areas comply with as few as 30 percent of environmental regulations.

LAJA, Bolivia, Aug. 27--Bolivian President Evo Morales stepped up his nationalization campaign on Saturday by announcing the withdrawal of energy and forestry concessions inside some 20 national parks, Reuters said.
Morales was elected in December 2005 on a platform of nationalization of natural resources, land redistribution and support for coca leaf production. He nationalized the country’s energy industry on May 1.
“Here and now, this is the beginning of the nationalization of our natural resources,“ he told about 100 Indian peasants in Laja, a community 680 miles (1,100 km) north of La Paz located within Madidi National Park.
“We have to defend our wood and other natural resources,“ Morales said. “You all must be the forest rangers.“
The government did not specify which energy companies would be affected. But Spain’s Repsol YPF, France’s Total and Brazil’s Petrobras have exploratory concessions within Bolivia’s national parks.
“About 20 national parks will once again be run (entirely) by the state,“ said Erland Flores of the National Service of Protected Areas.
Morales, Bolivia’s Vice President Alvaro Garcia and several ministers arrived at this remote corner of the Amazonian jungle, near the border with Peru, in two helicopters provided by Venezuelan President Hugo Chavez.
Venezuela and its chief oil client, the United States, often spar as Chavez promotes his self-styled socialist revolution as an alternative to US policies and bolsters ties with US adversaries Cuba and Iran.

N’DJAMENA, Chad, Aug. 27--The president of Chad said that oil companies Chevron Corp. and Petronas must leave the country, claiming they had not paid taxes. According to AP, he said his country would assume responsibility for their oil production.
President Idriss Deby, speaking on state-run radio Saturday, gave the companies, which have been part of the African country’s oil production consortium that is led by Exxon Mobil, a deadline of just 24 hours to start making plans to leave.
“Chad has decided that as of tomorrow (Sunday), Chevron and Petronas must leave Chad because they have refused to pay their taxes,“ Deby said in a message broadcast on state-run radio.
It wasn’t immediately clear if the companies would be forced to leave by Sunday or if the deadline would be extended. It wasn’t immediately known how many workers the two companies have in Chad.
Deby said that Chad, which is in the midst of setting up a national oil company, would take responsibility for the oil fields that the US and Malaysian companies have overseen.
The oil fields account for some 60 percent of the country’s oil production.
Sabri Syed, a spokesman for Kuala Lumpur-based Petroliam Nasional Berhad said he could not immediately comment on Deby’s announcement.
Chevron issued a statement that said it was in compliance with its tax obligations.
“Chevron has not received any official notification from the Republic of Chad government asking Chevron to leave the country over tax issues,“ the statement read. “However, Chevron has been in full compliance with all of our tax obligations.“
Mark D. Boudreaux, a spokesman for Exxon Mobil, told AP that his company has “not been officially notified of any action by the government of Chad regarding Esso Chad or Exxon Mobil.“
He said that Esso Chad, an Exxon Mobil affiliate, has not been asked to leave the country, either.
The production and export of petroleum in Chad are overseen by the Exxon Mobil-led consortium. Under the mechanism, Texas-based Exxon Mobil is responsible for 40 percent of the country’s production, while Chevron and Petronas each have 30 percent.
The three companies agreed to finance a risky US$4.2 billion 1,060-kilometer (662.5-mile) pipeline to deliver oil from landlocked Chad to the Atlantic port of Kribi in Cameroon.
The companies agreed to invest the money after the World Bank gave the project its blessing and after Chad passed a World Bank-backed oil revenues law that required most of the money to be allocated to health, education and infrastructure projects.

DHAKA, Bangladesh, Aug. 27--A half-day general strike paralyzed part of Bangladesh’s northern region on Sunday after six people died, apparently shot by security forces, during violent protests the previous day over a coal mine planned by British company, Reuters reported.
Officials and witnesses said more than 100 people were also wounded during clashes lasting several hours on Saturday, when police and paramilitary troops fired hundreds of gun shots and at least 50 teargas shells to disperse about 20,000 demonstrators.
The protesters had laid siege to the offices of Asia Energy Plc at Phulbari, where the mine is being developed, demanding its immediate closure.
Police said the violence had erupted when the protesters, some armed with bows and arrows, tried to storm the office.
The Communist Party of Bangladesh, which backs the protesters, said eight people had been killed and local media said seven. At least 60 people, including eight policemen, were reported to have been treated in hospital.
Asia Energy wants to develop open pit mining at Phulbari in Dinajpur district, 350 km (220 miles) northwest of the capital, Dhaka.
But local residents and rights groups have objected, saying the mine would displace hundreds of families and damage the environment.
Following Saturday’s fatal clashes, they called for a half-day strike in districts of Dinajpur, Thakurgaon and Panchagarh, with a full-day shutdown at Phulbari. Sunday is a working day in Bangladesh.
As tension continued to build, the authorities imposed a ban on rallies and protests at the mine site, but police said they feared protesters would defy it.
“We are bracing for more trouble today,“ said a police officer at Phulbari, adding that reinforcements were being called in.
Gary Lye, CEO of Asia Energy Corporation (Bangladesh) Pty Ltd, issued a statement on Saturday denying that the Phulbari project would harm the environment and saying it would benefit local people.
Asia Energy said it had submitted a scheme of development and a feasibility study for the Phulbari mine and was waiting for final government authorization.
The first coal is expected to be mined in 2008 with annual production increasing rapidly to a peak of 15 million tons by 2013.
Asia Energy will also double the capacity of a 500 megawatt coal-fired power plant.
It plans $3 billion capital expenditure on the mine and power plant plus $10.4 billion in operating costs over 30 years.

KUALA LUMPUR, Malaysia, Aug. 27--ASEAN countries set a new milestone in regional integration by agreeing last week to fuse into a European-style single market by 2015, but its members must strive to become more savvy if they want to achieve the aim, the bloc’s chief said.
After clearing the first hurdle in cutting tariffs on merchandise trade over years of negotiations, a tougher job now faces the Association of Southeast Asian Nations as it seeks to remove non-tariff barriers and free up the flow of services, investment and skilled labor across the region, said ASEAN’s Secretary-General Ong Keng Yong.
Economic rivalry among its 10 members, decades-old protectionist policies and domestic political turmoil are major obstacles to forming an ASEAN Economic Community by 2015, five years earlier than originally planned. The goal does not call for a single currency system.
“In the old days, we had an ASEAN bus with a 100 horsepower engine. Now we have gone into the workshop and refit the same bus with a 200 horsepower engine and use new additive for our engine, so we can drive faster,“ Ong told AP in an interview Saturday at the end of weeklong ASEAN trade ministers’ meetings.
“We need to make the people in the bus change their mentality. Instead of dressing like a country bumpkin going to the city, we have to become more savvy, be more open minded.

TOKYO, Aug. 27--Japanese Prime Minister Junichiro Koizumi begins a trip to Kazakhstan and Uzebekistan from Monday, in a bid to secure rich energy resources in the region, where China and Russia are increasing their influence.
Reuters quoted Japanese officials as saying that the three-day tour, the first to Central Asia by a Japanese prime minister, reflects the strategic importance of the region for resource-poor Japan, that depends on the Middle East for almost all of its oil imports.
Along with crude oil and natural gas, Kazakhstan has the world’s second-largest reserves of uranium. That’s also vital to Japan, which needs the nuclear fuel because atomic energy produces about 30 percent of the electricity used in the country.
Koizumi is expected to bring up Japanese participation in uranium mine projects in his talks with Kazakhstan President Nursultan Nazarbayev.
While some Japanese firms already have uranium deals in Kazakhstan, they hope that Koizumi’s visit would lead to more.
“For those of us involved in the energy resources business, this is welcome news,“ said Eiichiro Otsuka, deputy general manager at Sumitomo Corp’s nuclear energy department.
Sumitomo Corp., Japan’s third-largest trading firm, and Kansai Electric Power Co. agreed in January with Kazakhstan’s state-run KazAtomProm to jointly develop a uranium deposit in the country. Another trading firm, Itochu Corp., also has a deal with KazAtomProm to buy uranium.
But some in the Japanese business community in Kazakhstan say the uranium deals are a consolation prize for being left out in the competition with China for Kazakh oil.
Koizumi’s trip is also part of Tokyo’s diplomatic drive to show its commitment to the region, Japanese officials said, as China and Russia strengthen their ties through a forum that brings them together with Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan.
Japanese officials say that Tokyo does not see the SCO as a threat to its interests in Central Asia, but the United States, Japan’s closest security ally, has expressed displeasure at the forum for lobbying to push US forces out of the region.