Billionaire Benettons Won't Regret Leaving Italy's Motorway Network

(Bloomberg Opinion) -- The billionaire Benettons are being forced out of Italy’s motorway network in the wake of the tragic collapse of the Morandi Bridge in 2018. After years of wrangling over what consequences should be faced by Atlantia SpA, the Benetton-backed infrastructure company that maintained the structure, a settlement is all but inked. It’s far from the worst outcome for the family.

The government last week announced a package of measures against Atlantia, including the partial nationalization of the company’s 88% stake in Autostrade per l’Italia SpA, the toll-road business that operated the Genoa bridge.

The precise details remain hazy. Plan A would be for postal-savings bank Cassa Depositi e Prestiti SpA to join with allied institutional investors in acquiring control of Autostrade by buying just over 50%. CDP would inject capital in the process. At that point, Atlantia could own less than 40% of the highway operator. Then the unit would be given its own stock-market listing, so shareholders in Atlantia would gain a separate share in Autostrade.

With a 30% stake in Atlantia, the Benettons would on that basis receive a holding of just over 10% in Autostrade, nudging them into the background. It’s still not clear what the financial terms of this maneuvering would be. The pricing would have to be guided by what the outside investors decide Autostrade is worth, to demonstrate it’s gone through a free-market process. But the government is imposing a host of measures that reduce Autostrade’s value — 3.4 billion euros ($3.9 billion) in compensation, maintenance and toll cuts, plus much harsher cancellation terms for its main motorway concession.

La Repubblica says the postal-savings bank could put in 4 billion euros for a 33% holding. If that was all new cash going into the business, it would value Autostrade at 12 billion euros with the injection, and just 8 billion euros without it. Before the disaster — and the pandemic — analysts estimated the equity to be worth around 14 billion euros. 

The billions potentially saved nationalizing Autostrade on these terms could be countered by both higher Italian borrowing costs and reduced inward investment if international investors balk at this highly politicized resolution to the row. The investigation into the disaster has yet to conclude. Autostrade has said it has always met its obligations under the highways concession agreement, spending more on maintenance than it had originally committed to.

There is also a big question here about whether the apparent transfer of value from Atlantia to CDP and new investors is so great. It will ultimately depend on the cost of upgrading Italy’s roads and thousands of other road bridges. That will take years to emerge. The burden is now being shifted to a new set of shareholders.

For Italy, the solution is probably the most workable way of achieving its political goal of being seen to punish the Benettons in the aftermath of the disaster. But the Benettons are also getting something close to a clean break from a politically charged and seemingly endless situation that their family name has become synonymous with.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.

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