Italy MPs seek autonomy for Milan bourse after Euronext takeover

Giuseppe Fonte and Andrea Mandala
·2 min read

* Euronext to buy Borsa from LSE for $5.1 bln

* Italy cleared deal unconditionally under 'golden powers' rules

* New inquiry could be opened if found necessary

By Giuseppe Fonte and Andrea Mandala

ROME, April 14 (Reuters) - Italy's ruling parties asked the government on Wednesday to take action to ensure some autonomy for the Milan bourse as it prepares to become part of pan-European stock market operator Euronext.

Last year Euronext triumphed over rival SIX and Deutsche Boerse to agree buy Milan's Borsa Italiana from the London Stock Exchange for 4.3 billion euros ($5.1 billion).

The deal is expected to close by mid-2021. But the change in ownership of an infrastructure deemed of strategic national relevance is stirring concerns among Italian politicians.

In a document approved by parliament on Wednesday, the ruling coalition asked Prime Minister Mario Draghi to "safeguard the strategic asset of Borsa Italiana" and ensure that Italy plays a "prominent role" within Euronext.

To secure Rome's backing in the race for Borsa, Euronext had teamed up with state investor Cassa Depositi e Prestiti (CDP) and Italy's biggest bank Intesa SanPaolo.

The deal envisages CDP taking a stake of around 8% in Euronext, becoming its top investor alongside Caisse des Depots et Consignations which also owns 8%.

Rome has been closely monitoring the deal with an eye in particular on MTS, a bond trading platform where Italy's 2 trillion euro bonds are negotiated.

"Italy should use the special powers it has to protect key assets such as Borsa if needed," Giulio Centemero, a lawmaker from the co-ruling right-wing League party, told Reuters.

Italy's "golden powers" allow Rome to ward off or set strict prescriptions on takeovers in key industries.

Following an investigation into the deal to see whether the use of golden powers was warranted, the government of former Prime Minister Giuseppe Conte in December gave it an unconditional green light, two sources close to the matter said.

However, Rome can open a new inquiry if elements emerged that threaten Borsa's core functions.

Euronext is also awaiting approval from market regulator Consob after detailing its plans for Borsa.

Under Italian law, Consob can oppose Euronext's plans if they are deemed to threaten the "sound and prudent management of the market."

"Consob and the government should make sure that Borsa Italiana is granted autonomy and investments," Centemero said.

A person familiar with the matter has said Consob, which will retain its oversight of the Italian market, had concerns about having full access to bourse data which it needs to exercise its functions.

The technological integration of Borsa's platform into Euronext is another area of concern, the person said.

($1 = 0.8359 euros) (Reporting by Giuseppe Fonte in Rome and Andrea Mandala in Milan; Editing by Valentina Za and Mike Harrison)