Italy’s Interventionist State Nails $10 Billion in New Deals
(Bloomberg) -- For the second time in just under a week, state-backed lender Cassa Depositi & Prestiti SpA has shown that it can be counted on when the government wants to throw its weight around in the corporate world, signaling a new chapter of intervention in Italy.
London Stock Exchange Group Plc agreed on Friday to a $5.1 billion sale of Italian exchange operator Borsa Italiana to Paris Bourse owner Euronext NV, which engineered the deal with Italian lender Intesa Sanpaolo SpA and Cassa Depositi. CDP, as the state lender is known, will acquire a 7.3% stake in Euronext and get the right to name its chairman.
That news came in the wake of CDP becoming the biggest single investor in Nexi SpA with its $5.3 billion purchase of SIA SpA, a deal designed to create one of Europe’s biggest payment providers.
The government of Prime Minister Giuseppe Conte has sought to carve out a bigger role in the business world as the pandemic has hammered the country’s economy, even as critics warn that the premier is reversing a privatization drive that Mario Draghi promoted when he led the Treasury in the 1990s.
CDP, which was recently endowed with more than 40 billion euros ($47 billion) to buy companies, has been Conte’s go-to vehicle for expanding state influence in everything from highways and digital infrastructure to stock exchanges and steel.
The Borsa deal “strengthens Italy’s role in Europe’s capital markets,” Economic Development minister Stefano Patuanelli said Friday on Facebook. “Italy will be at the front both on the governance and at operational level.”
Conte’s government worked for months to broker the Borsa Italiana deal, which is set to create the largest listing venue in Europe. Rome sees Borsa as a strategic asset due to its ownership of MTS SpA, a platform used to trade government bonds.
CDP will act as an “anchor investor” in the Nexi-SIA deal, and the lender is also expected to obtain a significant stake in a planned unified national telecommunications network, after giving its backing to ex-monopolist Telecom Italia SpA’s project to speed the rollout of a faster fiber-optic system.
The next step in that process would see utility Enel SpA selling its stake in Open Fiber SpA, a competitor to Telecom Italia. CDP could acquire a stake in that portion of the deal as well, people familiar with the matter have said.
The state lender has also been front and center in the acrimonious tussle between Rome and the billionaire Benetton family, in what’s perhaps Italy’s longest-running and highest profile series of corporate negotiations.
The two sides are planning to restart negotiations as soon as this week to resolve the two-year dispute over Benetton-controlled highway operator Autostrade per l’Italia SpA, according to people familiar with the matter.
The family, which controls Autostrade through infrastructure colossus Atlantia SpA, had agreed to cede control of the highway company to investors led by CDP in July but the parties have so far failed to reach a final deal amid differences over the value of the assets and legal questions.
©2020 Bloomberg L.P.