MILAN, Aug 14 (Reuters) - Italian Prime Minister Giorgia

Meloni hopes Monte dei Paschi di Siena (MPS) won't end

up "dismembered" as a result of a takeover bid launched by the

country's biggest bank Intesa Sanpaolo, she told

financial newspaper Milano Finanza on Friday.

Bailed out by the state in 2017 and reprivatised in

2023-2024, in June MPS became the target of an unsolicited €36

billion ($42 billion) takeover bid by rival Intesa.

Meloni had repeatedly said in recent years the government

wanted the use the reprivatisation of MPS to foster competition

in the banking sector by helping the emergence of a third large

player alongside market leaders Intesa and UniCredit.

"The government is not an active player in the banking

sector. We were involved in part when we controlled MPS, which

we inherited in a comatose state and restored back to health,"

Meloni said.

She said MPS, the world's oldest bank with strong local

roots, had become a prized asset.

"I hope current market dynamics can lead to an even stronger

and more competitive system, to the benefit of households and

firms. And I hope MPS will not be dismembered, losing its name

and identity."

Intesa's plan envisages selling half of MPS branches, the

Siena central offices and its brand to insurer Unipol

Unipol, to be combined with Unipol-owned bank BPER

.

MPS CEO Luigi Lovaglio said last week he was studying bid

defence options, noting that the breaking up of the commercial

network would destroy value.

Asked about UniCredit's hostile takeover of

Germany's Commerzbank, Meloni said UniCredit, which

already owns Munich-based HVB in Germany, should continue to

have strong Italian roots

"I hope a positive dialogue can be established between the

bank and the German authorities," Meloni added.

($1 = 0.8657 euros)

(Reporting by Anna Uras; editing by Giselda Vagnoni and

Valentina Za)