UPDATE 2-Unipol appeals antitrust terms for FonSai merger


* Unipol says moves to sell assets continue

* Regulator had placed 30 pct share cap on various segments

* New group would have 37 pct of car insurance segment

(Adds Unipol statement, shares)

By Andrea Mandala

MILAN, Oct 11 (Reuters) - Italian insurer Unipolhas lodged an appeal against conditions laid down by thecountry's competition watchdog to clear its planned takeover ofpeer Fondiaria-SAI to create Italy's No.2 player.

Unipol said on Thursday it had filed an appeal with anItalian administrative court seeking a review of regulatoryrequirements it considered too penalising.

While Unipol did not say which measures it wanted reviewed,a s ource close to the matter said the cap placed on the newgroup's market share in the auto insurance business wasperceived as too tough.

Unipol said the procedure for the sale of insurance assetsand financial holdings requested by the antitrust authority wasunderway, rejecting earlier media reports that the appealtemporarily halted the disposal process.

Shares in Unipol ended down 1.25 percent at 1.73 euros,underperforming a 1.2 percent gain on the Milan blue chip index.

Fondiaria is Italy's leading motor insurer and merging itwith Unipol would create a company with around 37 percent ofthis segment and 32 percent of the non-life insurance market.

On June 20 the antitrust regulator called on Unipol todispose of assets so as not to exceed a 30 percent threshold inthe various domestic insurance segments.

To meet competition watchdog demands, Unipol had previouslysaid it was ready to sell policies attracting 1.7 billion eurosof annual premiums.

In January investment bank Mediobanca crafted adeal for Unipol to save the faltering Fondiaria. The merger isplanned to be operative on Jan. 1, 2013.

On Wednesday antitrust head Giovanni Pitruzzella said therewere various deadlines for Unipol's commitments, adding the more"industrial" operations had been put back to 2013.

Among the conditions laid down by the regulator is anundertaking by Unipol to sell a 3.8 percent stake in Mediobancabefore the end of 2013.

Bologna-based Unipol, controlled by a group of cooperatives,will own around 67 percent of the new company when formed.

Filings from market regulator Consob on Thursday showed thatsome cooperatives had raised their stakes in Unipol followingthe purchase of preference shares left unsold after theinsurer's 1.1 billion euro rights issue.

The Lima cooperative raised its stake in Unipol to 4.55percent from 3.12 percent while the Coop Adriatica and Nova Coophad 3.315 percent and 2.308 percent respectively.

(Additional Reporting By Danilo Masoni, writing by StephenJewkes, Editing by Lisa Jucca and Mark Potter)


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