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Foreign exposure: Italy shields its companies with ad-hoc law

Palazzo Chigi
The measure readies the State lender and other government agencies to intervene and recapitalise, if need be, companies hit by its use of anti-takeover powers in the face of undue foreign influence – such as China and Russia’s

Golden power time. On Thursday, the Italian government approved a decree-law containing “measures to protect the national interest in strategic, productive sectors”. It provides for economic measures related to the use of golden power – i.e. the State’s ability to intervene in private dealings to protect the State’s national interest.

  • Companies affected by a veto placed on national security grounds can apply for compensatory measures.
  • The stakeholders involved are the Ministry of Business, State lender CDP and the National Agency for Inward Investment and Economic Development (Invitalia).

Tracing it back to: Adolfo Urso, Minister of Business and Made in Italy, who strongly supported the measure and committed to combining industrial policy and national security in the face of Chinese and Russian threats.

Rome is looking out for itself – increasingly so. The number of operations flagged by Italy’s investment screening mechanism – complemented by the government’s Golden power, is rising. In 2021 the government flagged 496 potential investments, takeovers or asset-acquiring deals were flagged.

  • That’s a substantial increase from 2020 (342) and miles beyond the 2019 figure (83).
  • All three cases of blocked acquisitions in 2021 concerned Chinese-owned companies.
  • In 2022, Mr Draghi’s government also prevented a Russian company, Rosatom, from acquiring a hydrogen company through a subsidiary.
  • Last year, Reuters reported that Mario Draghi’s government was “considering offering compensation to firms penalised by the use of its anti-takeover powers”. It came after it prevented LPE, a Milan-based producer of semiconductor equipment, from being acquired by a Chinese company.

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