The insurance arm of Italian auto giant Fiat, Toro Assicurazioni, has made a formal offer to buy 24.4% of insurer La Fondiaria from Montedison.
The stake amounts to 93,685,233 ordinary shares. The offer price is €6.73 per share, or a total of about €630m (£393.5m).
The Toro Group is Italy's third-largest insurance group, with total premiums of about €5.6bn (£3.5bn) in 2001 and investments of over €17bn (£10.6bn) at the end of 2001.
The board of Montedison has approved Toro's offer, which Fiat said represents a 23% premium over the average Fondiaria closing share price in the past three months.
Toro's offer comes after insurance regulator ISVAP earlier this week said it opposed an existing plan for insurer Societa Assicuratrice Industriale (SAI) to raise its stake in Fondiaria to 30%.
Newswire Dow Jones reported that the SAI plan had been hatched by a previous Montedison management to help stave off a bid from Italenergia, a vehicle led by Fiat and French electricity giant Electricite de France.
Italenergia successfully took over Montedison.
With the acquisition by Toro of a stake in Fondiaria, Fiat said it was taking a further step in strengthening its service and non-cyclical activities.
It said it aimed to lay the groundwork for the possible development of industrial cooperation agreements between Toro and Fondiaria, which should bring operating synergies for both companies.
