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Rome moves to shield Italy Inc from corporate raiders
February 8, 2017 / 3:04 PM / 10 months ago

Rome moves to shield Italy Inc from corporate raiders

* Government plans transparency law on stake purchases

* Some lawmakers urge tougher action to protect firms

* Signals growing protectionist sentiment in Italy

* French buyers biggest overseas investors in country

* Graphic-Italian inbound M&A:

By Giselda Vagnoni and Giuseppe Fonte

ROME, Feb 8 (Reuters) - Italy’s government is concerned about the vulnerability of its companies to foreign takeover, particularly those it considers of national importance, and is moving to defend them.

Rome is drafting new corporate transparency rules to force buyers who build up significant minority stakes in Italian firms to disclose what their ultimate intentions are, a reform aimed at guarding against hostile foreign takeovers.

Few details have been disclosed about the planned law but Massimo Mucchetti, a senior senator in the ruling Democratic Party (PD), told Reuters the proposals envisaged a threshold of 5 percent at which a buyer must disclose their aims regarding the company.

The government drive follows aggressive stake-building by French tycoon Vincent Bollore’s media group Vivendi, which has accumulated a holding of almost 29 percent in Italian broadcaster Mediaset since last year. Vivendi is the top shareholder in Telecom Italia.

There have also been a spate of acquisitions of high-profile Italian companies across a wide range of sectors in recent years, with the charge led by French firms. Deals have included ChemChina’s 7.1 billion euro ($7.6 billion) acquisition of tyre maker Pirelli in 2015 and French asset manager Amundi’s 3.5 billion euro purchase of Italian rival Pioneer late last year.

Last month Italy’s Luxottica and France’s Essilor agreed on a 46-billion-euro merger to form an eyewear powerhouse that will be headquartered and listed in Paris.

Some PD lawmakers are urging tougher government action.

While few people expect Rome to go beyond its disclosure rules for now, the planned law and political debate signals protectionist sentiment is on the rise in Italy after years of a relatively open approach to foreign acquisitions - one championed by former Prime Minister Matteo Renzi.

This has echoes of a trend seen in the United States, where Donald Trump won the presidency after a campaign advocating “America First” protectionist policies.

The planned Italian law also underlines growing political concerns about the prospect of companies deemed of strategic national importance - including Mediaset, national airline Alitalia, insurer Generali and former telecoms monopoly Telecom Italia - falling under overseas control.

Mucchetti, chairman of the Senate’s industry committee, said the planned disclosure law would put “some sand in the engine” for foreign takeovers but added it would not affect the Vivendi-Mediaset situation as it could not be applied retrospectively.

He said he was reporting what was discussed in a meeting between members of his committee and government officials.

A spokeswoman for the industry minister declined to comment on the 5 percent threshold or provide details about the draft legislation, saying discussions between the government and lawmakers were at an early stage.

Vivendi and Mediaset declined to comment.

Vivendi has previously denied it is seeking a hostile takeover of Mediaset , saying its stake-building is aimed at strengthening Mediaset.


French buyers have been the biggest overseas investors in Italian companies over the past decade, with total deals worth about $65 billion since 2008, according to Thomson Reuters data, ahead of U.S. buyers in second place with about $39 billion.

Over the same period, Italian companies have invested a relatively paltry $7.3 billion in France.

The Italian government announced it was planning to increase corporate transparency requirements late last month, without providing details.

Another PD Senator on the industry committee, Salvatore Tomaselli, told Reuters the government hoped it would be approved by parliament by next month. He said Italy aimed to make rules “more stringent like those in France”.

Under French disclosure rules for listed companies, the threshold for triggering a compulsory public filing, including a “statement of intent” is set at 10 percent.

Concerns about overseas buyers go right to the top.

When New Prime Minister Paolo Gentiloni made his first speech in parliament - a day after Amundi announced its acquisition of Pioneer in December - he warned Italy was “not open to incursions”, in a distinct break from Renzi.

The Amundi deal raised national interest concerns among some politicians because Pioneer oversees 146 billion euros of Italian savings and around 30 billion euros of Italian sovereign bonds.

More than 100 senators - from both the ruling and opposition parties - have since lodged a question in parliament asking the government what steps it plans to take to protect Generali from any foreign takeover.

The insurer is seen by Rome as a strategic asset because of its holdings of around 70 billion euros of Italian government bonds.

Francesco Boccia, a PD lawmaker who heads the lower house of parliament’s Treasury Committee, is among those calling for tougher action to keep Italian companies out of overseas hands.

He wants the government to strengthen its so-called golden powers to veto deals and dictate transaction terms in sectors deemed important to national security, including communications, energy and transport.

“Italy is open to any sort of incursion. If we do not defend our (corporate) pillars they either will fall apart or will be taken away by foreign bidders,” he said.

($1 = 0.9391 euros)

Additional reporting by Crispian Balmer in Rome, Sophie Sassard in London and Mathieu Rosemain in Paris; Editing by Mark Bendeich and Pravin Char

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