Italy: Don't Make Us An Offer, Because We'll Refuse It

Despite being known for their delicious food and scenic countryside, Italians don’t like foreigners meddling around in their companies, and now they are putting a stop to it.

The Italian government is going to bolster its food, energy, defence, and telecom companies against foreign takeovers. This comes after French dairy company Lactalis bid for Parmalat SpA, and this could derail the takeover. It also prevents any foreign oil companies going after Eni, Italy’s largest energy company.

Power group Edison SpA is also in a battle of control with French shareholders, and just a couple of weeks ago, LVMH Mo√ęt Hennessy Louis Vuitton SA announced it was buying Bulgari.

Stefano Saglia, the junior industry minister said his ministry would, “identify certain sectors the government believes to be strategic on which it reserves the right to intervene when it discovers the investors come from protected markets.” These comments were made by Stefano Saglia at a conference in Ravenna.

Foreign investors who wish to acquire Italian companies need to get approval from the government 60 days in advance, which also would give Italy’s stock market regulator Consob equivalent powers to France’s AMF.

“This move continues a recent trend in Europe to provide greater protections for target companies. We saw a similar consternation in the U.K. in the wake of Kraft’s takeover of Cadbury,” said Prof. Scott Moeller of London’s Cass Business School.

“It is unfortunate that the Italians are following the French rather than the French [and the Italians] providing greater openness. Some of the sectors identified as ‘strategic’ are anything but that in today’s linked economies of continental Europe,” Prof. Moeller added.

“Cabinet approved a decree which extends the deadline for summoning the shareholder meeting. This is a measure which will allow us to evaluate whether it is appropriate to introduce other measures which could also concern the Parmalat group,” Italian Industry Minister Paolo Romani told Parliament.

“For this reason, there have been meetings with the main operators in the sector with the aim of creating an alliance which would put financial and industrial participants together to create a national food grouping that would be in a position to compete on the global market,” he said.

— By Roger Nachman

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