MILAN (Reuters) - Italian shipbuilder Fincantieri is talking to Leonardo about a possible acquisition of the defence group's OTO Melara unit, a source familiar with the matter said on Saturday.
There are contacts between the two groups over the unit, the source said.
Italian daily La Stampa on Saturday reported that Fincantieri was in early talks to buy OTO Melara, famous for its naval gun production, and could launch an offer before the end of the year.
The newspaper said any deal would be vetted by the Italian Treasury which is top shareholder in Leonardo and, through state lender CDP, Fincantieri.
Fincantieri is a leading manufacturer of military ships.
(Reporting by Stephen Jewkes; editing by Jason Neely)