Leading Belgian shoe chain Brantano is to merge with holding group Mitiska in a move that will see the two combine their retail operations, it was reported on Monday.

The De Standaard newspaper said Mitiska, which holds a 41 per cent stake in Brantano, will merge with the footwear retailer and increase its capital in 2003 to reduce the group's debts and improve its balance sheet.

The report saw Brantano's shares fall six per cent in early trade today while both companies remained tight-lipped on the reported deal.