UPDATE 1-Poste Italiane buys Italy's second-biggest postal group Nexive

(Adds Poste CEO comments, details)

MILAN, Nov 16 (Reuters) - Poste Italiane said on Monday it was buying domestic rival Nexive from German fund Mutares and Dutch mail and parcel group PostNL .

Poste Italiane, the former postal monopoly in Italy, said it plans to consolidate Nexive, the country’s second-biggest mail group, and its 1,300 workers, giving it a market share in Italy of around 94% in mail delivery and 24% in parcel distribution.

The acquisition will allow Poste to extract synergies from its loss-making smaller rival, which has been struggling to cope with falling mail volumes and the impact of the coronavirus pandemic.

“As a result of the acquisition, we mainly expect cost savings,” Poste Chief Executive Matteo Del Fante said, speaking with journalists on Poste’s TV channel.

Nexive has an approximate 12% market share, with annual volumes of around 350 million items, of which 5% was registered mail in 2019. It also has a 1% market share in parcels.

“The acquisition will be key for Poste to shorten the time to break-even of its mail, parcel and distribution division,” Del Fante said, without giving a precise timeline.

Poste reported a 1.3 billion euro ($1.54 billion) net profit last year as its insurance, banking and digital payments businesses more than offset a 306 million euro loss at its parcel and distribution division. Restrictions linked to the coronavirus pandemic have further reduced mail volumes, it said.

The precise value of the Nexive deal, which is expected to close by January, will be calculated at the end of a due diligence process, Poste said, adding the initial agreement was based on an enterprise value for Nexive of 60 million euros.

The Italian antitrust watchdog has give a preliminary approval to the deal, but has 30 days to ask for potential adjustments.

$1 = 0.8446 euros $1 = 0.8445 euros Reporting by Francesca Landini; Editing by Susan Fenton