(BSS/AFP) - UniCredit, Italy`s second-largest bank, said Friday it had secured approval from the European Central Bank for its takeover bid for smaller Italian rival Banco BPM.

UniCredit launched its public exchange offer for Banco BPM in November, valuing Italy`s third-largest bank at 10.1 billion euros ($11 billion).

Banco BPM considers the move hostile, and in January filed an appeal with the Italian competition watchdog against the move.

Separately last month, BPM shareholders approved the bank`s takeover bid for asset management group Anima, sweetening its offer from EUR6.20 euros to 7 euros per share.

But Banco BPM suffered a setback on Wednesday, when the ECB objected to the application of the so-called "Danish compromise" for a potential Anima acquisition, although BPM said the ECB decision was not definitive.

The EU regulatory provision allows easier terms for banks that own insurance operations when calculating their capital ratios.

UniCredit Chief Executive Andrea Orcel had warned that he could rescind his offer for Banco BPM were it to relaunch its Anima takeover bid, warning the bank`s shareholders of a possible negative effect on BPM`s equity capital.

The ECB approval also comes as UniCredit muses a takeover of Germany`s Commerzbank, for which it has secured the green light from the ECB to raise its stake to 29.9 percent.

UniCredit Chief Executive Andrea Orcel had warned that he could rescind his offer for Banco BPM were it to relaunch its Anima takeover bid, warning the bank`s shareholders of a possible negative effect on BPM`s equity capital.