Telecom-Telefonica deal sparks outcry in Italy
Only Confindustria neutral24 September, 17:54
Telefonica SA is paying 1.09 euros for the Telco shares in a 324-million-euro capital increase following an overnight deal and its stake is set to rise to 70% with a further capital increase of 117 million euros following approval by antitrust authorities in Brazil and Argentina. It has an option to raise this amount to 100% in January 2014.
TI is an ex-State monopoly and Italy's largest telecommunications company.
''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.
Deputy Senate Speaker Maurizio Gasparri, also from FI, called on TI management to provide ''clarification'' of the operation, given Telefonica's track record as shareholder of reference.
''The company has suffered in recent years due to the presence of a shareholder of reference that, in fact, has not played a driving role'' in its management, Gasparri said. 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.
Chamber 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''.
Gennaro 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 can not become a country where others go shopping, but must have an industrial policy,'' Migliore declared.
The Senate whip for ex-premier Mario Monti's centrist, market-oriented Civic Choice (SC) party saw TI's troubled fate as the fruit of over-protectionism that governed the company's past.
''I think Telecom is the child of a history gone wrong, that has its roots in drawing-room capitalism, which was over-protected and is unwilling to take real risks,'' said Gianluca Susta.
''Both Telecom and Telefonica must operate in a European context that must undergo further restructuring,'' Susta added, explaining that he foresaw evermore consolidation among Europe's telecoms as operators seek to be competitive on a global scale.
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,'' Angeletti said.
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-2000's, 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.
Meanwhile, 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''.