* To sell two units to UnipolSai for 875 mln euros
* To move 3 bln euros of bad loans to special vehicle
* Unipol shares rise, UnipolSai's fall (Recasts, adds broker comments, shares)
By Andrea Mandala and Stephen Jewkes
MILAN, June 30 (Reuters) - Italian financial group Unipol will sell assets to its main operating unit, insurer UnipolSai, to simplify its structure and pay for a clean up of its struggling banking business.
The Bologna-based company said on Friday it would shift 3 billion euros ($3.4 billion) of bad loans to a special vehicle to bolster Unipol Banca and get its banking unit ready to take part in the expected consolidation of Italy's banking system.
At the same time, it will sell two insurance holdings to UnipolSai for 875 million euros to put all its insurance business in the hands of its main operating subsidiary.
UnipolSai said the acquisitions would shave about 17 percentage points off its Solvency II ratio - a key industry measure - at the end of 2017.
The move sent UnipolSai shares lower, but supported those of the holding conglomerate.
"UnipolSai shareholders appear to be the marginal losers of the deal due to the high price paid for the two insurance assets and potentially the need to contribute to the investment in bank non-performing loans," said Exane BNP Paribas analysts.
Unipol, which said gains from the insurance disposals would offset the 780 million euros it expects to lose from the restructuring, will mark down its bank bad loans to 20 percent of their nominal value.
The group's CEO, Carlo Cimbri, told a conference call the low market value was due to an excess of supply as lenders were under regulatory pressure to cut bad debts.
"Our intention is to work on the portfolio with a dedicated structure to maximise recoveries," he said.
Italian banks are saddled with a mountain of bad debts that were accumulated during a harsh recession.
Unipol's move comes days after Brussels gave the green light for Italy to inject up to 17 billion euros into two failing regional banks in the Veneto region,
Rome is also scrambling to secure European approval to give state support for its third-biggest bank, Monte dei Paschi .
Cimbri, who said the reorganisation would have no impact on the group's dividend policy, ruled out any merger of Unipol and its insurance subsidiary for the time being.
But analysts are convinced a merger is just a question of time.
"Overall this gets the group much closer to a position where it can merge the two entities down the road and therefore unlock the holding discount," Exane said.
As part of the shakeup, UnipolSai also said it was ending its bancassurance joint venture with Banco BPM in a move that had been widely expected.
Unipol has been building a stake in BPER, a regional lender headquartered close to the insurer. Cimbri dismissed as "groundless" press speculation that it could further raise the BPER stake.
At 0931 GMT, UnipolSai shares were down 3.6 percent while the European insurance sector was up 0.4 percent. Shares in Unipol were up 2 percent.
$1 = 0.8752 euros Reporting by Stephen Jewkes and Andrea Mandala; Editing by Mark Potter