Legal Updates on Italian Defensive Measures Against Hostile Takeovers and Government's Golden Powers


  • Disclosure of the goals pursued by acquisition of the stake in an Italian listed company
  • Broader Government’s golden powers by extension to “highly intensive technology” services and assets
  • Basic EU requirements for investment screening procedures on the grounds of ‘security’ or  ‘public order’

In October 2017, the Italian Government approved the law decree n. 148/2017 (the Decree) introducing new provisions on (i) disclosure requirements on stakes detained in Italian listed companies, and (ii)  identification of highly intensive technology sectors subject to the Government’s golden power. 

The Decree is immediately effective (i.e. as of 16 October 2017) but it is subject to conversion into law not to lose effect – as well as to possible changes - within 2 months (by middle of December 2017). The Decree requires additional implementation by way of secondary level regulations to be enacted thereafter.

The Decree comes after the ongoing debate on foreign investments which is taking place at EU level to address the concerns raised by some of the Member States in respect of the takeover of European companies with key technologies and strategic assets by certain investors, in particular state-owned enterprises investing as part of that country’s strategic industrial policy.

A month before, on 13 September 2017, the European Commission proposed a regulation establishing a new framework for screening of foreign direct investments into the European Union (the Regulation). The Regulation is just a proposal by the European Commission and has to be considered by the European Parliament and the Council of the European Union whereby it will be subject to the negotiation, amendment and approval by the Member States. Considering the diverging opinion among the Member States, the process will take time and realistically the new rules may take effect in late 2018 or early 2019.  

Foreign investors may increasingly need to assess whether their investments in the EU Countries raise security or public order concerns and, in such a case, consider their notification strategies in the relevant countries.


In addition to the already existing disclosure requirements concerning detention of qualified stakes (with voting rights) in Italian listed companies, and unless required to launch a mandatory takeover bid, investors acquiring a stake exceeding 10%, 20% or 25% of the target’s voting capital are now required to render a statement disclosing their goals for the forthcoming 6 months specifying:

  • the way of financing the acquisition
  • whether they are acting alone or in agreement with other parties 
  • whether they intend to acquire additional stakes in the company, take over the control or influence the management of the company, and its strategy
  • their intentions in respect of shareholders agreement which they are party to, and
  • whether they intend to propose to increase or revoke members of the board of directors or board of statutory auditors.

The statement must be rendered to the company and CONSOB (the Italian securities commission) within 10 days as of the acquisition of the relevant stake; the terms for the disclosure to the market will be detailed in the Decree’s implementing regulations.

The statement must be updated in the following 6 months in case of changes in the relevant intentions due to objective supervening circumstances.

Breaches of the disclosure obligations trigger relevant administrative and pecuniary sanctions (and in extreme circumstances of market manipulation, criminal sanctions) as well as freezing of the voting rights concerning the relevant stake.

These new requirements are intended to guarantee the transparency of the market and allow target companies to react against hostile takeovers.

Pending the Decree’s conversion and implementation, the new disclosure requirements and related sanctions are indeed applicable.


The Italian Government has a veto right to stop investments in the defense & national security sector and in networks, plants, assets and relationships deemed strategic for the national interest in the fields of energy, transportation and communications.

The Decree has broaden the Government’s golden powers by extension to “highly intensive technology” services and assets such as:

  • critical or sensible infrastructures, including data storage and management and financial infrastructures
  • critical technologies, including artificial intelligence, robotics and semiconductors, dual application technologies, cyber security, space and nuclear technology
  • security of supply of critical inputs
  • access to sensitive information or ability to control sensitive information.

The specific definition of such “highly intensive technology” services and assets will be detailed in the Decree’s implementing regulations to be enacted by middle of February 2018.

To date the Italian Government could exercise these golden powers only in case of extraordinary and serious threatened situations prejudicial to the national interests on security, networks and plants and supply continuity. 

By the Decree, such golden powers may be exercised also in case of danger for the national security and public order. Further, in case of foreign investments that may affect national security and public order, the Government may rely its evaluation on the fact that such investor is controlled by the government of a foreign Country, not part of the European Union, also via significant financing.

This entails a higher discretion by the Government in the evaluation of the situation that may trigger the golden powers enforcement. 

The new provisions will apply to the screening procedures commenced after the entry into force of the Decree (i.e. after 16 October 2017) and, as part of the Decree are subject to conversion into law and possible changes.

The approval of such provisions has anticipated the implementation of part of the subject matters of the EU regulation proposed by the European Commission described in the following paragraph.


The proposed Regulation does not require the Member States to adopt or maintain a screening mechanism for foreign direct investment but intends to create an enabling framework for Member States, which already have or wish to put one in place, and to ensure that any such screening mechanism meets some basic requirements on grounds of security or public order, transparency obligations, the rule of equal treatment among foreign investment of different origin, and the obligation to ensure adequate redress possibilities with regard to decisions adopted under these review mechanisms.

The Regulation provides for a cooperation mechanism between Member States and the Commission which can be activated when a specific foreign investment in one or several Member States may affect the security or public order of another.

The European Commission itself will not have the power to block foreign investments.

The Regulation states that in reviewing an investment on the grounds of ‘security’ or  ‘public order’, a Member State may consider the potential effect of the investment on areas including exactly the “highly technology” areas mentioned above (i.e. critical infrastructures, technologies and inputs, cyber security, sensitive information, etc.).

If an investment concerns projects or programs of EU interest, such as projects involving EU funds, the Commission would be able to carry out its own assessment and address an opinion to the Member States, which they would be required to take into account and provide an explanation if the opinion is not followed.  The proposal provides an indicative list of such projects and programs including the areas of research (Horizon 2020), space (Galileo), transport (Trans-European Networks for Transport, TEN-T), energy (TEN-E) and telecommunications.

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