Italian insurer Unipol retracted its petition against a decision made by the competition regulator. The watchdog asked Unipol to sell its Euro 1.7 billion or US$2.2 billion worth of portfolio assets. This was the requirement made by the regulator so that it would approve Unipol's joint venture with Fondiaria-SAI, a spokesperson said.

Last year, the insurer approved rescuing Fondiaria in a complicated four-way tie-up. However, the deal was not finalized due to the progression of regulatory and legal difficulty.

Italy's anti-trust watchdog said Unipol would get its blessing if the company would sell its assets.

Unipol filed an appeal because it needed the amount to be reconsidered and lowered.

On Wednesday, a Unipol spokesman stated, "The appeal has been pulled."  Conversely, the company refused to give information why it decided to withdraw its own appeal.

"Progress has been made in identifying a buyer for the assets," an informant familiar to the issue said, without giving additional facts.