Under the accord UniCredit will purchase Allianz's 11.72% stake in Croatian bank Zagrebacka Banka, which is part of the UniCredit group.
Allianz Holding in turn will acquire the 16.84% stake held by Zagrebacka in Croatian insurer Allianz Hrvatska.
UniCredit, which will ends up owning 96.2% of Zagrebacka, said it was not considering squeezing out minority shareholders or delisting.
UniCredit said it was reinforcing its position in the Croatian banking market in light of the country's good growth prospects and upcoming euro area membership.
"Both UniCredit and Allianz remain committed to the attractive bancassurance market in Croatia," it said.
Allianz is a leading UniCredit shareholder with a 3.4% stake.
Under new CEO Andrea Orcel, UniCredit has strengthened its ties with Allianz by renewing their partnership agreements in Italy and Germany and pursuing closer technological integration.
(Reporting by Valentina Za; editing by Gianluca Semeraro and Jason Neely)