Monte dei Paschi di Siena (MPS) said on Wednesday that the European Central Bank had approved its proposed takeover of larger Italian lender Mediobanca.MPS, which still counts the state as its largest shareholder since a 2017 bailout, launched the bid in January 鈥 setting in motion one of the many consolidation battles currently playing out in Italy鈥檚 banking sector.The lender is offering investors 23 new shares for every ten shares they hold in Mediobanca. This would value the latter at 鈧14.2 billion, based on the closing stock price on Tuesday. Mediobanca鈥檚 market capitalisation is currently about 鈧16.7bn.The ECB has set conditions for the proposed takeover, although not in the way that certain analysts had expected it to.Some speculated that the central bank would require a minimum number of investors to accept the offer for the deal to proceed.In reality, there is no stipulated threshold for the deal to go ahead, although MPS must satisfy other conditions if it receives an acceptance rate lower than 50%.If this is the case, it must provide the ECB with a report confirming its 鈥渄e facto control鈥 of Mediobanca, or otherwise provide a strategy outlining what it will do with the stake.If the deal secures a support level higher than 50%, the bank has six months to submit an integration plan.Mediobanca rejected MPS鈥 bid in January, warning that it would be 鈥渟trongly destructive鈥 and weaken its business model.In April, Mediobanca then played a defensive strategy, launching a separate takeover bid for Italian lender Banca Generali, giving shareholders an alternative option to the MPS deal.Another chapter in the saga involves the Del Vecchio and Caltagirone families, who are major shareholders in Mediobanca.The Italian government sold Mediobanca shares to the families in November, although there are reports that some investors were shut out of this process.The FT reported on Tuesday that the European Commission was investigating the sale. The assessment could potentially lead to the opening of a state aid investigation. Euronews has contacted the European Commission for comment.Other Italian banks currently caught up in the consolidation frenzy include Banco BPM and UniCredit. The latter attempted to acquire the former earlier this year, although regulatory hurdles are now reducing the possibility of a close.MPS鈥 board will meet on 26 June to officially issue new shares and raise funding for the proposed takeover.