October 13, 2017 / 6:33 PM / 2 years ago

UPDATE 1-Italy passes decree to ward off foreign takeovers

(Adds details, minister quote)

By Giselda Vagnoni

ROME, Oct 13 (Reuters) - Italy’s cabinet on Friday passed a decree to force investors that build up minority stakes of at least 10 percent in Italian listed companies to disclose what their intentions are on final ownership.

The change, aimed at warding off hostile foreign takeovers, comes as French media company Vivendi is under scrutiny in Italy for its stake-building in Telecom Italia and in broadcaster Mediaset.

The new rules on takeovers signals protectionist sentiment is on the rise in Italy after years of relatively open approach to foreign acquisitions which French companies, in particular, have taken advantage of.

The decree also extends the government’s so-called “golden powers” to block takeovers by non-EU companies to high-technology sectors, the cabinet said in a statement.

“Italy is a country that is open to international investments but it demands that investors respect the rules and we safeguard our national interests like all the world’s large economies,” Industry Minister Carlo Calenda said after the cabinet meeting.

The decree, which takes effect immediately and must be approved by parliament within 60 days, obliges investors who take “a significant stake” in listed companies to “clarify the goals they are pursuing with the operation,” the statement said.

The new rules will not affect Vivendi’s investments in Italian groups as they cannot be applied retroactively. Vivendi, which has built stakes of around 29 percent in broadcaster Mediaset and 24 percent in Telecom Italia has denied it is seeking a hostile takeover.

The extension of the government’s golden powers to high-tech sectors aims to increase Italy’s security regarding areas such as data management, dual use technology and infrastructures, the cabinet said.

It follows a call last month by European Commission chief Jean-Claude Juncker to limit China’s ability to buy up European companies in infrastructure, hi-tech manufacturing and energy.

Recent deals by foreign companies in Italy have included ChemChina’s 7.1 billion euro ($7.6 billion) acquisition of tyre maker Pirelli in 2015 and French asset manager Amundi’s 3.5 billion euro purchase of Italian rival Pioneer late last year.

In September, Italian shipbuilder Fincantieri took effective control of STX France under a shared ownership agreement ending a dispute that had soured bilateral ties.

Under French disclosure rules for listed companies, the threshold for triggering a compulsory public filing, including a “statement of intent” is set at 10 percent, the same level as Italy set on Friday. (Additional reporting by Gavin Jones. Editing by Jane Merriman)

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