The golden power forcefully hit the headlines in recent days in connection with the announcement of the sale of the majority of the share capital of Comau Spaa company active in industrial automation and belonging to the group Stelantisin the North American fund An Equity Partners. However, in the second quarter of 2024, the activity of implementing the golden power of the Presidency of the Council of Ministers (PCM) will be particularly intense.
Special powers and impositions
The use of special powers in the form of the imposition of acquisition requirements Cogne Special Steels of the entire share capital of Mannesmann Stainless Tubes and its subsidiaries including Salzgitter Mannesmann Stainless Tubes Italia. In particular, the PCM established several provisions related to the protection of industrial property with respect to the majority shareholder of the purchasing company, the Taiwanese group Walsin Lihwa. We also note the adoption of a decree “implementing the golden power containing certain non-obstructive provisions” with respect to the purchase of 35% of Saras, the company that owns the Sarroch refinery, by Vitol, a Swiss-Dutch group active in oil brokerage; the operation was also authorized by the European Commission in accordance with the merger control law. According to what was reported in the press, the provisions concerned «the compulsion not to close the plants, to guarantee the continuity of supplies to Italy and European countries, to trace the origin of the oil refined in Sarroch, to maintain plants that provide 40% of Sardinia’s energy needs”.
Not using special powers in some operations
However, the Pcm did not exercise special powers with regard to the acquisition of Vodafone Italy from Swisscom, a company controlled by the Swiss Confederation. As the special powers were not used in connection with the acquisition project by Saffron, a multinational manufacturer of jet engines for the aeronautical industry, of Microtecnica, a Turin-based company that makes flight control systems. The case is noteworthy because on November 16, the PCM decided to use special powers in the form of opposition to the acquisition operation itself. Resolution which was the subject of appeal to the Lazio Regional Administrative Court from Saffron USA, Saffron and Microtechnics. By two orders on June 13, 2024, the TAR, upon seeing the waiver documents filed by the appellants, declared that the corresponding judgments had been executed. On the occasion of the new authorization resolution (at this time), Saffron stated that it has undertaken «a series of commitments (…) that address the concerns expressed in the Italian decree and provide adequate safeguards for Italian interests».
Other examples of regulatory interactions
Non-exercise of special powers also in relation to the establishment of a new company in Italy, the Omoda and Jaeco Automotive, for the assembly and sale of motor vehicles of the Chinese company Chery. The investment of Iren, a company active in the energy sector, in Egea, a Piedmontese multi-utility, is an example of the interaction between the golden power legislation, the merger control law and the bankruptcy procedure. This is a hypothesis that proves that, even in a case of not using special powers, the time of an M&A operation subject to multiple reviews should be well thought out at the very beginning of the operation.
Notification and Withdrawal Permissions
Another example of administrative multi-scrutiny in the second quarter is the authorization of the Bank of Italy that Prelios sales, a company active in the management of alternative assets, by North American fund Davidson Kempner, to X3 Group, an Ion group company. Permission has been obtained more than seven months after signing the agreement. The withdrawal of notification by Ferretti with respect to the project for the purchase and cancellation of treasury shares and certain management changes. Withdrawal of the notice shall be the result of the annulment of the board of directors’ resolution which would have included the conditions of the notice obligation. The PCM noticed this and closed the investigation.
Outlook for the next quarter
In the next quarter we will note the outcome of the transactions announced in the market between April and June which may be of concern three strategic sectors: energy, industrial sector and cybersecurity. In the energy sector, it is the takeover bid by controlling shareholder Taiwan Cement Corporation for Nhoa, a company active in the energy transfer sector. The PCM in 2023 already deemed Nhoa to hold strategic assets and imposed requirements related to the company’s governance structure. In the industrial components sector, the sale of Forgital by the US fund Carlyle was announced. Last June 22, the board of directors of Tinexta company active in cybersecurity, has announced that it intends to exercise the call option on Defense Tech Holdingactive in technologies that serve defense, space and cybersecurity.
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*Golden Power Observatory