Italy’s Government Wants More Pull in the Business World: Here’s What to Watch

(Bloomberg) — A string of long-festering corporate crises in Italy could offer the rightwing administration of Prime Minister Giorgia Meloni a chance to make its mark on the business world and expand state influence over the economy.

Government officials say Rome is now seeking greater control over a number of strategic sectors, signaling a readiness to deploy billions of euros in state money to shore up ailing companies in areas from telecommunications, to energy, to aviation. 

While the approach meshes with Meloni’s pledge to protect national production and favor domestic firms, it also risks imposing a high cost on a country that already suffers from a mammoth debt load and sluggish growth.

Here are the companies to watch:

Telecom Italia

Rome is scrambling to find a way to shore up debt-ridden Telecom Italia SpA, and it’s called the ex-phone monopolist’s multi-billion-euro landline grid a strategic asset. Cabinet Undersecretary for Telecommunications Alessio Butti says the government wants “a state-controlled, wholesale-only, national network.”

The project could include an eventual merger between Telecom Italia and smaller state-backed rival Open Fiber SpA, though the grid’s valuation has been a sticking point, with Telecom Italia advisers assessing it at around €20 billion ($21 billion) and top shareholder Vivendi SE at about €31 billion, people familiar with the matter said earlier this year. 

That’s forced Rome to put a bid by state lender Cassa Depositi e Prestiti SpA — the carrier’s biggest shareholder and the top investor in Open Fiber — on hold. KKR & Co. could also bid for the network in partnership with the government, people familiar with the matter have said.

ITA Airways

The Meloni government is looking to retain an oversight role at ITA Airways, which is hemorrhaging cash and risks running out of funds, as part of a possible deal with Deutsche Lufthansa AG.

That would signal a change of approach from the previous administration’s willingness to cede control of the carrier. 

One option under review is seeking special powers to influence or veto governance or strategy at ITA — the successor to troubled flagship Alitalia — following the sale of a stake to Lufthansa. 


The Ilva steel works has been a headache for a series of governments since being placed under administration almost a decade ago. Ilva is now operated by a company majority-owned by ArcelorMittal, with a state-led firm as a minority shareholder. 

The Meloni government isn’t planning an outright nationalization of Ilva, Industry Minister Adolfo Urso said last week, preferring to raise fresh funds with ArcelorMittal’s help. Italy had previously agreed to raise its stake to 60% by May 2024.

Ilva, which this year expects to produce about 3 million tons of steel — only about half of its original target — employs around 10,000 people. 

ISAB Lukoil Refinery

The government has paved the way for putting the ISAB refinery, owned by Russia’s Lukoil PJSC, under temporary administration, citing its strategic importance for oil and gas supply. Industry Minister Urso, however, denies that the refinery is destined for nationalization.

The Sicily-based refinery is one of Europe’s biggest oil-processing complexes, with a combined capacity of well over 300,000 barrels a day, according to data compiled by Bloomberg. Talks to sell it to non-Russian investors have been going on for months. 

Negotiations with US-based Crossbridge Energy Partners LLC could be completed soon, according to a Reuters report, while an investor group led by Qatar’s Ghanim Bin Saad Al Saad could also make an offer, daily la Repubblica reported. The government says it will set conditions and could veto any deal because the refinery is deemed to be strategic. 

Monte dei Paschi 

Finance Minister Giancarlo Giorgetti recently confirmed to lawmakers that Italy is committed “to managing the exit of the state” from lender Banca Monte dei Paschi di Siena SpA “in an orderly way.” 

Italy has repeatedly bailed out Paschi, and the state now owns over 64% of the lender. An attempt by the country’s last government to sell Paschi to UniCredit SpA collapsed. 

Last month the state injected about €1.6 billion in fresh funds into the troubled lender, part of a €2.5 billion share sale needed to replenish capital buffers and finance more than 4,000 job cuts.

Ansaldo Energia

The government has called energy-plant turbine maker Ansaldo Energia SpA an “extremely important technological asset,” signaling support for a rescue package led by Cassa Depositi after the company ran into trouble amid the recent gas market downturn.

Workers at the company made headlines earlier this autumn by shutting down traffic in Genoa — where the company is based — while management worked on a turnaround plan, its second in two years. 

Under that proposal, now being reviewed by creditors, Cassa Depositi will need to write off more than €200 million in loans and inject €300 million into the business, while bank debt will be restructured. Cassa Depositi already led a €400 million recapitalization in 2020.



–With assistance from Daniele Lepido and Sonia Sirletti.

©2022 Bloomberg L.P.


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