The Italian Government has the right to exercise the “golden power” opposing or conditioning acquisitions and corporate transactions of companies which own “strategic” assets in Italy. Golden Power Italian regime has been significantly amended from time to time, until the most recent Law Decree n. 23 of 2020 converted with amendments into Law n. 40 of 2020. These recent innovations, introduced in response to COVID-19 emergency, extended – on a temporary basis – Golden Power’s scope.
Italian Law Decree no. 23/2020, effective as of 9 April 2020, converted with amendments into Law dated 5 June 2020, n. 40 (the “New GP Law”) introduced a series of provisions aimed at extending the scope of the Prime Minister’s office of Golden Power to a number of new industry sectors. In addition to those sectors that were already defined as “strategic” – namely defense, national security, energy, transports, and communications – the Golden Power obligations now also apply to the following sectors:
(i) critical infrastructures (both virtual and physical) including, inter alia, water, health, financial infrastructures (including insurance and credit sectors);
(ii) critical technologies and dual-use products (i.e. artificial intelligence, nano-technologies, bio-technologies);
(iii) security in critical productive factors’ supply (i.e. energy and raw materials, access to sensitive information or the ability to control them, media liberty and pluralism);
(iv) iron and steel industry and agri-food sector,
(collectively the “Extended Sectors”).
“Golden Power” obligations
The New GP Law expanded to the Extended Sectors the obligation to notify the Prime Minister’s office (“Ufficio della Presidenza del Consiglio dei Ministri”) of any acquisition carried out by extra-EU entities, until the issuance of the final decree which should specify in full detail the strategic activities included in the Extended Sectors (the “Enacting Decrees”).
According to the New GP Law, until December 31, 2020:
– a foreign entity or person (this includes intra-EU as well) must notify the acquisition of participations in companies operating in the Extended Sectors, provided that the transaction is likely to determine the control over the company to be acquired (pursuant to Article 2359 of the Italian Civil Code and the Consolidated Financial Act);
– an extra-EU entity or person must notify the acquisition of participations in companies operating in the Extended Sectors, provided that the transaction entails a proportion of voting rights or of the participation in the target equal to 10%, having due regard to the shares or quota already directly or indirectly held, provided that the overall amount of the transaction is equal to at least Euro 1,000,000. All acquisitions in excess of 15%, 20%, 25% and 50% thresholds must be notified as well:
– the Italian and/or foreign companies (intra-EU and extra-EU) holding strategic assets in the Extended Sectors and in energy, transports and communications sectors are obliged to notify all acts, resolutions and transactions adopted by and/or involving them and entailing: (i) a change in the holding, control or availability of the strategic sectors; (ii) a change in the allocation of the strategic sectors; or (iii) the transfer of subsidiaries operating in the strategic sectors (provided that this transfer entails a change under (i) or (ii) above). The transactions include: (i) mergers or de-mergers; (ii) transfer of the registered office abroad; (iii) amendment of the corporate purpose; (iv) dissolution; (v) transfer of business or lines of business including strategic assets; or (vi) allocation of the Extended Sectors as guarantee.
The notification must be made: (A) within 10 days from the date of the closing in case of acquisition of the companies’ participation; and (B) within 10 days from the signing of a deed or resolution or binding agreement and anyway before that the extraordinary transaction will become effective. The Prime Minister’s office is entitled to exercise the Golden Power on the notified transactions within the following 45 days. Upon the expiration of the 45-day period, the notified transaction can be implemented.
Ex officio procedure and sanctions
The New GP Law also introduced the Italian Government’s faculty to exercise the Golden Power ex officio in case of failed notification of the transaction by the relevant company(ies). In case of exercise of the Golden Power ex officio, the 45-day period starts running from the end of the proceeding aimed at assessing the breach of the notification obligation.
The exercise of the Golden Power ex officio does not supersede the sanctions already provided by Law Decree 21/2012, according to which the breach of the notification obligation by companies operating in strategic sectors entails:
– acquisitions: (i) suspension of voting rights connected with the acquired participation; (ii) in case of opposition by the Prime Minister’s office to the acquisition, the duty to re-transfer the participation within one year (in case of failed transfer within the one-year deadline, the Court may order the transfer of said participations pursuant to Article 2359-ter of the Italian Civil Code); (iii) the payment of an administrative fine equal to up to twice the transaction value and in any case not lower than 1% of the turnover realized by all the companies involved in the notified transaction in the last financial year and approved;
– resolutions, acts and corporate transactions (other than acquisitions): (i) invalidity of the resolutions and acts adopted in breach of the notification obligation; (ii) the Italian Government’s faculty to order to the company and to the eventual counterparty to restore the earlier situation; (iii) the payment of an administrative fine equal to up to twice the transaction value and in any case not lower than 1% of the turnover realized by all the companies involved in the notified transaction in the last approved financial year.