GENEVA (AP) — Telecoms operator Swisscom confirmed Wednesday it's in talks with Vodafone Group toward a possible purchase of its Italian subsidiary for 8 billion euros ($8.65 billion).

The Swiss company, which is majority owned by the Swiss government, said in a statement it's in “advanced exclusive negotiations” to buy all of Vodafone Italia and merge it with Swisscom's Italian subsidiary, Fastweb.

Swisscom says it expects the purchase, if concluded, would add value and cash flow to the Swiss company and help improve its dividend policy.

The Swiss telecoms operator says the deal would bring lower costs and pave the way for synergies, and comply with aims of the Swiss executive branch, the Federal Council.