Borsa Italiana and Deutsche Börse are set to sign a letter of intent to merge as early as this week in a bid to push through a three-way merger with Euronext and derail a rival offer from the New York Stock Exchange, according to stock market sources.

If agreed, the proposed deal will increase pressure on Euronext's proposed merger with the NYSE, which has come under fire from shareholders and politicians calling for a European solution to stock exchange consolidation.