In a second increase, Italenergia upped its bid price from 3.07 euros a share to 3.16 euros a share.

The final price represents a 30% premium to the 12-month average of Montedison's share price and is worth about 5.5bn euros ($4.8bn).

Montedison's shares bounced up close to 3.16 euros in early trade on Monday.

Italenergia, which also includes three large Italian banks, already owns 52% of Montedison.

End of the battle

Their success in winning over Montedison's board puts to an end to their battle with the powerful Italian bank Mediobanca to win control of the energy company.

Mediobanca, a 15% shareholder which until recently controlled Montedison through a shareholder pact, has conceded that it can no longer fight off the Italenergia bid.

The only hurdle that remains to Italenergia is the European competition authority, which still has to approve the deal.

The European Commission confirmed on Monday that it would be examining the takeover, since Fiat's involvement gave the deal a European dimension.

Fiat earns less than two-thirds of its revenue in Italy, pushing the Montedison takeover into the EU's jurisdiction.

Even before it increased its bid, Italenergia had been given the green light by stock market regulator Consob.

This was after the consortium had accumulated a controlling interest in Montedison - built up over the last few weeks.

Prior objections

Prior to accepting the sweetened bid, Montedison had argued that the takeover would violate competition laws, since it would give EdF access to the Italian electricity market.