Italy extends vetting powers to protect key national assets

ROME – Italy’s parliament has extended Rome’s special vetting powers to protect its key national assets by including the hydroelectric sector and new companies that plan to operate in industries deemed strategic, lawmakers said on Monday.

The 15-month old government lead by Prime Minister Mario Draghi has used its so-called “golden powers” to set conditions on scores of mergers and has blocked several attempts by China to extend its presence in the euro zone’s third-largest economy.

The changes, approved by the Senate overnight, were introduced in a government decree that was originally set up to strengthen anti-takeover regulation in the telecoms and defence industries.

The upper-house Senate decided that a notification to the government will be required to set up a company operating in sectors deemed strategic in case a non-EU firm owns a stake of at least 10%, a parliamentary document seen by Reuters said.

A separate amendment established that the golden powers also apply to companies operating major hydroelectric concessions, such as dams.

“The extension of the golden power to the hydroelectric sector is a decisive step towards the ecological transition and in giving value to economic and energy assets,” said Andrea Cioffi, a senator with the 5-Star Movement who promoted the measure.

As part of its plans to beef up the scrutiny of corporate takeovers, the Italian government will soon establish a dedicated division to oversee merger deals involving strategic companies.