Italy

Vivendi can live with Italy’s “golden power” move

17 October 2017

Premier Paolo Gentiloni wants Telecom Italia to install state-backed directors and a special appointee to handle security matters. It’s a headache for top shareholder Vivendi. But government sentinels are preferable to being forced to spin off assets or accept state investment.

ACS faces bumpy road to join Abertis battle

13 October 2017

The Spanish builder is planning a cash-and-share offer for the toll-road operator using its German Hochtief unit. Beating Atlantia’s $20 billion bid faces several hurdles. The Italian group has offered more cash. For ACS, taking on a lot more debt could also be problematic.

Italy’s new voting law gives illusion of stability

12 October 2017

Parliament is vetting new voting rules ahead of next year’s ballot. The system may encourage a coalition of left and right parties, and hurt the radical 5-Star Movement. Yet ideological strife is likely to weaken any future government, and the chance of meaningful reforms.

EU bank plan exposes mutualisation mirage

11 October 2017

The euro zone is pushing a joint deposit insurance scheme to complete its banking union. But the revised backstop might only kick in if national banking systems pass an invasive health check. It’s a reminder of how far European countries are from underwriting each others’ debts.

Telecom Italia has least to gain in mogul truce

11 October 2017

Vivendi, chaired by Vincent Bolloré, wants to end a dispute with Silvio Berlusconi’s Mediaset. That may involve uniting the broadcaster’s TV unit with Telecom Italia, controlled by the French firm. The telco may end up with an unprofitable asset, with uncertain prospects.

Vivendi needs to swallow bitter pill in Italy

9 October 2017

The French conglomerate is in talks with Silvio Berlusconi’s Mediaset, after falling out over a deal to buy the mogul’s pay-TV unit. Vivendi may not get a good price, but attacks by regulators and Berlusconi’s rising political clout could make a protracted dispute more painful.

Italian high finance picks up tab for bank sins

5 October 2017

Sickly mid-sized lender Banca Carige wants bondholders to take a loss as part of a 1 bln euro recapitalisation. Yet it will spare retail investors, leaving more pain for banks and insurers. The country’s flawed banking model is to blame. The good news is taxpayers won’t suffer.

ECB bad-loan blitz to spur Italy insolvency reform

4 October 2017

The European Central Bank wants lenders to fully provision against new bad loans within seven years. That could be painful in Italy, where repossessing collateral can take even longer. The new rules give Rome a short window to finally get its bankruptcy law into shape.

ChemChina makes quick buck from Pirelli flip

3 October 2017

The Chinese state giant and its European partners had to put the brakes on their pricing ambitions for the tyremaker’s 6.5 bln euro IPO. Yet less than two years after taking Pirelli private, the consortium is on course to squeeze private equity-style returns from the relisting.

Telecom Italia CEO’s job: fix governance discount

29 September 2017

The telco named Amos Genish its new boss. The Israeli’s to-do list includes mending relations with the Italian government and clarifying those with shareholder Vivendi – as well as fighting fresh competition. Unless he addresses these problems, TI’s lowly valuation will endure.

Italy gets narrow lead in race for EU naval giant

28 September 2017

Shipbuilder Fincantieri has won conditional control over French rival STX, which Paris nationalised suddenly in July. The pact defuses a cross-border diplomatic row. But the real battle will be fought over the ownership of a European naval champion that is now in the making.

EU probe may be least of EssilorLuxottica problems

27 September 2017

Brussels is polishing its glasses for a close antitrust read of the $54 bln merger of Essilor and Luxottica. But the eyewear behemoths face other headaches, like customer defections and new competitor alliances. By the time the deal closes, its benefits could look fuzzy.

Italian banks become unlikely governance converts

26 September 2017

UniCredit will give its board authority to propose directors. Mediobanca has taken similar steps. This reflects the loss of power of foundations and investor blocks. Broader shareholder representation could make banks healthier, if boards resist the urge to feather their nests.

Italy’s 5-Star puts respectable face on radicalism

25 September 2017

The protest movement, doing well in opinion polls, has named a 31-year-old lawmaker as its leader. Luigi Di Maio’s cool appeal contrasts with founder Beppe Grillo’s vitriolic style and may win over moderate voters in 2018. But going mainstream could undermine its basic appeal.

UniCredit has narrow lead in Commerzbank M&A fight

21 September 2017

The Italian bank wants to buy the 14 bln euro lender. BNP Paribas is also a reported partner. A deal makes sense: the target is cheap, and Germany needs to sell a stake. UniCredit’s scale gives it an edge, but Berlin may favour the French bank, or a domestic peer like Deutsche.

Mediobanca tries to have Generali cake and eat it

20 September 2017

The bank may sell a 3.2 bln euro stake in Assicurazioni Generali to a vehicle shared with other investors. The baroque plan would give Mediobanca capital to grow, and allow it to keep its influence over Italy’s biggest insurer. The appeal for its potential partners is less clear.

Pirelli IPO leaves long-term questions unanswered

18 September 2017

The Italian tyremaker, sold to ChemChina in 2015, is seeking to raise up to $4 bln in a listing. A shift towards luxury tyres has boosted sales and margins. But growth targets look ambitious and there is no clarity on who will succeed long-term boss Marco Tronchetti Provera.

Vivendi legal slap exposes folly of Italian push

14 September 2017

The French media group effectively controls Telecom Italia despite having only a 24 pct stake, a watchdog ruled, meaning Vivendi may have to consolidate 25 bln euros of its debt. TI has been plummeting in value too. Vincent Bolloré, who chairs Vivendi, has no good options.

EU foreign investment review raises bar for China

13 September 2017

Brussels has proposed a pan-European scheme to vet sensitive purchases by other countries. Unlike the U.S., rulings will be non-binding. Even so, the People’s Republic will find it harder to buy up EU infrastructure and technology. It’s another reason for Beijing to open up.

Italy’s latest bank bailout is gentle on taxpayers

11 September 2017

The country’s deposit fund is forking out 640 mln euros to clean up three small banks before they are sold to Credit Agricole. Prepping a target for a foreign rival looks generous and the fund’s returns are uncertain. At least taxpayers will be spared a hit this time.