Telecom Italia becomes more Spanish
Outcry follows over 'sellout' to foreign bidder24 September, 18:46
However, for the moment, Telefonica only has 46.2% of the voting rights, while Generali has a 19.32% stake with 30.6% of voting rights, and Intesa and Mediobanca have 7.34% each, with 11.6% voting rights. Subsequent to authorisation by the Brazilian and Argentinean antitrust authorities, it will underwrite another capital increase of Telco worth 117 million euros, also without voting rights, which will later be convertible into ordinary shares with voting rights of up to 70% of Telco. According to the terms of the agreement, Telefonica will then be able to acquire 100% of Telco as of January 1, 2014, a Telefonica press release said.
Beginning January 1, the Spanish company will be able to convert the shares acquired through the capital increase into voting rights in Telco, bringing them to 64.9%.
The agreement foresees that when 50% has been converted, Telco's Board of Directors will have 10 members, five of whom appointed by Italian partners and five by Telefonica, with the current assembly quorums unchanged.
A chorus of outcry from politicians of all stripes, unions and agribusiness associations followed the announcement Tuesday that Telefonica SA agreed to raise its stake in Telco. "The sale of Telecom to the Spanish Telefonica represents a true disaster for the Italian industrial system," said centre-right Forza Italia (FI) MP Fabrizio Cicchitto. Centre-left Democratic Party (PD) House whip Roberto Speranza worried over what he called "strategic assets of our country," and called for the executive to "report to the House as soon as possible" about TI's future. House whip of the PD's left-wing allied SEL party, Gennaro Migliore, lamented, "After a wrong privatization 15 years ago, now a sellout. And there are no protections for workers and users of a system as strategic as telecommunications". Migliore feared what TI's travails since privatization may mean for other strategic State holdings in companies like the airline Alitalia and defence giant Finmeccanica, which he said "are currently being discussed for civil-asset disposal". "Italy cannot become a country where others go shopping, but must have an industrial policy," Migliore said. Meanwhile unions and agribusiness groups blasted the TI deal as new foreign encroachment on tried Italian turf. "It is another hard blow for us. With this we will lose another of the few great enterprises that remained under Italian control," said chief of the UIL union, Luigi Angeletti, on Radio 1. "And what naturally happens will happen: that in the coming years, when it comes to deciding where to invest, (decisions) will be based on interests...not residing in Rome but in Madrid". Italian agribusiness association Coldiretti said the TI deal was another example of the escalation of Spanish and French presence in Italy, after a number of major Italian food and fashion companies were acquired by other Spanish and French groups. Spanish acquisitions included a 25% stake in leading Italian rice brand Riso Scotti by Spain's Ebro Food last month. Spain's Agroalimen di Barcellona Group took a 75% stake in Italian soup and broth giant Star.
In addition, Fiorucci salami as well as major Italian olive-oil brands Bertolli, Carapelli and Sasso have also been bought by Spanish enterprises since the mid-2000s, Coldiretti pointed out. "From today forward, Telecom will speak Spanish. It is a defeat for Made in Italy," agreed Giuseppe Politi, the president of the Italian farmers' group Confederazioni Italiana Agricoltori (CIA), who also rattled off a long list of leading Italian agribusiness brands that have been acquired by groups outside of Italy. "One needs to say 'enough'. There need to be clear rules,'' Politi said. But the managing director of Italy's powerful industry group Confindustria expressed neutrality to the TI deal. "The Telefonica-Telecom operation is a very important pivot for our industrial future," Marcella Panucci told RAI Radio 1. "However we of Confindustria are neutral with respect to the solution, in the sense that what matters is not the nationality capital nor the flags. What is important is that competitive conditions are promoted. And above all, that is it possible to exploit the full potential of next-generation networks, so we'll see what will be the plan that Telefonica presents".