Italy: Enacts New Anti-Raider Rules To Protect Strategic Assets

The Situation: Recent foreign investments in Italian blue chips led the Italian government to intervene to protect strategic assets.

The Result: Decree 148/2017 introduced new disclosure requirements regarding stakebuilding in Italian listed issuers and strengthened the Italian government's "golden powers" in relation to foreign investment in strategic industries.

Looking Ahead: The new disclosure requirements could have far-reaching consequences if not addressed before the Decree is converted into law. The boost in the government's golden powers broadens the spectrum of targets subject to government scrutiny.

In the wake of recent foreign investments in certain Italian blue chips, the Italian government issued Law Decree No. 148 of October 16, 2017 ("Decree"), which introduced new sweeping disclosure requirements triggered by the acquisition of qualified interests in Italian listed issuers. The Decree also expanded the so-called "golden powers" that the Italian government can exercise with respect to Italian companies operating in certain strategic industries.

New Stakebuilding Disclosure Requirements

In addition to the existing disclosure requirements regarding acquisitions of (or derivatives on) voting shares of Italian listed issuers in excess of certain thresholds starting at five percent for small/mid caps and three percent for large caps, the Decree now requires anyone who acquires an interest in an Italian listed issuer equal to or greater than 10 percent, 20 percent, or 25 percent (i.e., each time any of such thresholds is crossed) to disclose to the issuer and CONSOB, within 10 days, its goals for the next six months. The disclosure must indicate, among other information:

Their sources of financing;

  • Whether they are acting in concert with others;
  • Whether they plan to continue increasing their stake, including to gain control of the issuer or influence its management;
  • Their intentions about any shareholders' agreement to which they are a party; and
  • Whether they plan to push any change in the issuer's board of directors or supervisory board.

Should the investor's goals or intentions change in the six months following such disclosure, the investor will be required to promptly update the disclosure for an additional six-month period. If the previous disclosure was misleading or untruthful this could result in a market manipulation conduct. In the event of a failure to comply with the disclosure requirements, fines and other sanctions apply, including suspension of voting rights.

The Italian government mandated CONSOB, the Italian securities market regulator, to issue regulations implementing the new disclosure rules set forth by the Decree.

Preliminary Comments About the New Disclosure Rules

The Decree raises certain issues that should be addressed by the Italian Parliament before conversion of the Decree into law or by granting CONSOB a broader mandate to implement the Decree's provisions:

  • The new disclosure rules have far-reaching consequences as they apply to both large caps and small/mid caps. Since the majority of Italian listed issuers are small/mid caps, the new rules will impose additional burdens to investors in this market segment and may interfere with the investment strategies of institutional investors. Consideration should be given to restricting the scope of the new rules to large caps.
  • While the new rules set forth in the Decree apply to any acquisition of shares, however accomplished, it would appear reasonable for exemptions to apply to acquisitions of shares made either in the context of a tender offer or in excess of the applicable threshold requiring the launch of a mandatory tender offer. In both cases, the offer document already provides ample disclosure about the matters covered by the Decree, which suggests that duplicative disclosure be avoided.
  • The Decree appears to limit the application of the new disclosure requirements only to acquisitions of shares and not to derivatives. Unless the scope of the new rules is extended to encompass derivative transactions before conversion of the Decree into law, the effectiveness of the new rules may be limited.

Expansion of "Golden Powers" Scope

The so-called "golden powers" permit the Italian government to veto or impose conditions, among others, on (i) acquisitions by anyone (including Italian, EU, or foreign nationals) of interests in Italian entities operating in the defense and national security sector; or (ii) acquisitions by non-EU nationals of controlling interests in Italian entities operating in the energy, transportation, and telecommunications industries.

The golden powers apply to Italian companies performing certain strategic activities in these sectors, regardless of whether they are publicly traded or privately held and without regard to any minimum size requirements. In order for the Italian government to exercise its golden powers, those who intend to carry out transactions involving Italian in-scope entities must notify the Italian government in advance.

Among other provisions, the Decree:

  • Introduced a fine of not less than one percent of the combined revenues of the concerned entities and not more than twice the value of the transaction in all cases of failure to notify the Italian government;
  • Added high-tech companies (e.g., those dealing with data storage and processing, artificial intelligence, robotics, semiconductors, dual-use technology, and space/nuclear technology) to the industries that are subject to the golden powers;
  • Made the proposed acquisition by non-EU nationals of high-tech companies subject to the golden powers and relevant prior notice requirements; and
  • Indicated that, if the investor is controlled by a non-EU government, the Italian government will consider this as a relevant factor when assessing whether the investment can affect national security or public order.

Three Key Takeaways

  1. Decree 148/2017 introduced new disclosure requirements regarding stakebuilding in Italian listed issuers and boosted the Italian government's "golden powers" to curb foreign investment in certain strategic industries.
  2. The new disclosure requirements appear to be far-reaching in scope and raise interpretive issues.
  3. The boost to the Italian government's "golden powers" broadens the spectrum of targets subject to government scrutiny.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions