By Gilles Castonguay

MILAN--Unipol SpA (UNI.MI) said market regulator Consob has absolved the company of the obligation to acquire all of Milano Assicurazioni SpA (MI.MI) in a complex operation that would create Italy's second-biggest insurer through the combination of four companies.

Consob's decision is one of the final regulatory approvals awaited by Unipol before it goes ahead with a plan to take control of holding company Premafin Finanziaria SpA Holding di Partecipazioni (PF.MI) and its subsidiaries Fondiaria-SAI SpA (FSA.MI) and Milano Assicurazioni.

Requiring Unipol to take over all of Milano Assicurazioni would have risked the operation going ahead.

Unipol announced the regulator's decision in a statement late Thursday.

Once it completes the merger, Unipol will be the second-biggest insurer in the country after Assicurazioni Generali SpA (G.MI).

The process of combining the companies will take place through a series of capital increases. Unipol will first raise funds to proceed with the operation, and then participate in capital increases by Premafin and Fondiaria-SAI, taking controlling stakes in the pair of them.

Fondiaria-SAI said in a statement early Friday its board had approved the conditions for its capital increase, including the issuance of 252 ordinary shares for every one held at a price of EUR1 per ordinary share.

Write to Gilles Castonguay at gilles.castonguay@dowjones.com

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