UNI Unipol Gruppo SpA

By Giovanni Legorano

MILAN--The board of Unipol Gruppo Finanziario SpA (UNI.MI, UFGSY) approved late Thursday a capital increase of up to 1.1 billion euros ($1.39 billion) in a bid to find the cash needed to take over troubled insurer Fondiaria-SAI SpA (FSA.MI) and its related entities.

A later board meeting will decide on the exact amount of the capital increase, which will be completed by December 31, the company said in a statement.

Unipol agreed in January to a deal to rescue Fondiaria and create Italy's second-largest insurer after Assicurazioni Generali SpA (G.MI).

Under the merger deal--which involves four insurers--Unipol will take a 61% stake in the new business, Fondiaria-SAI will get 27.45%, Milano Assicurazioni SpA (MI.MI) will have 10.7% and Fondiaria SAI's and Milano Assicurazioni's parent, Premafin Finanziaria SpA Holding di Partecipazioni (PF.MI), will have 0.85%.

Write to Giovanni Legorano at giovanni.legorano@dowjones.com