Capital markets, Società
07/05/2021

Golden Power: latest legislative developments

di Francesca Torricelli, Partner, Andreas Fiore, Trainee, Greenberg Traurig Santa Maria

Italian Government intervention powers concerning private investments in strategic companies (hereinafter the “Golden Powers”), already subject to an intense reinforcement by the Law Decree no. 23/2020 (so-called”Decreto Liquidità”), have been subject to further recent regulatory amendments aimed at defining and specifying when the economic activity of a company can be considered of national interest.

The purpose of this document is to provide an overall picture of the evolution of the Golden Powers, with a focus on the most recent innovations provided for by the Prime Ministerial Decrees no. 180/2020 and 179/2020, together with a brief overview on the recent case history concerning Golden Powers enforcement by the Italian Government.

1.1 The original framework and the 2019 amendment

The original regulation of the Golden Powers, contained in Law Decree no. 21/2012, converted into Law no. 56/2012, allowed the Italian government to exercise the Golden Powers only in the event that a relevant prejudice to the strategic interests of the State was referred to companies active in the sectors of (a) defense and national security; and (b) energy, transport and communications. In particular, the Golden Powers consisted of:

  1. power to oppose or set specific conditions to the acquisition of shares of companies carrying out activities of strategic importance in sectors listed under letters (a) and (b), above;[1]; and
  2. veto power or power to impose specific requirements with respect to the adoption of certain corporate resolutions, the performance of acts or the execution of transactions by companies active in sectors under letters (a) and (b), above;[2].

It has to be pointed out that according to the original framework, the powers by the Italian Government to oppose or set particular conditions to the purchase of company’s shares with regard to companies operating in the energy, transport and communications sectors was limited to those acquisitions made by a non-European entity; as to the defense and national security sector the same powers could have been exercised by the Italian Government whenever the purchaser was an entity other than the Italian State.

The aforementioned original regulation was amended by Law Decree no. 105/2019, converted into Law no. 133/2019, aimed at extending the Italian Government Powers also to companies active in the industries identified by article 4, paragraph 1, letters a) and b) of Regulation 2019/452/EU, and namely:

  1. critical infrastructures (physical or virtual), including energy, transportation, water, health, communications, media, data processing or storage, aerospace, defense, electoral, financial infrastructures, sensitive areas (strutture sensibili), as well as investments in land and buildings essential for the use of such infrastructures[3]; and
  2. critical technologies and dual-use products, including artificial intelligence, robotics, semiconductors, cyber-security, aerospace, defense, energy storage, quantum and nuclear energy (energia quantistica e nucleare), as well as nanotechnology and biotechnology[4]

1.2 Amendments made by the so called “Decreto Liquidità

Within the context of Covid-19 epidemic outbreak, the Italian Government, in order to enhance Italian companies protection from speculative law priced purchase offers, has adopted Law Decree no. 23/2020, converted into Law no. 40/2020 (hereinafter the “Decreto Liquidità”). This new amended, on the one hand, has broadened the areas of intervention by the Italian Government and, on the other hand, has increased the number of transactions subject to filing.

Articles 15, 16 and 17 of the Liquidity Decree have, inter alia:

  1. extended the possibility of exercising Golden Powers also to companies active in the areas referred to in the remaining points (c), (d), (e) and (f) of article 4(1) of Regulation 2019/452/EU, namely: (i) security of supply of critical inputs (sicurezza dell’approvvigionamento di fattori produttivi critici), including energy and raw materials, as well as food security; (ii) access to sensitive information, including personal data; and (iii) freedom and pluralism of media (libertà e pluralism dei media);
  2. allowed the Italian Government - until 31 December 2020 - to exercise Golden Powers also in the event that the purchaser of shares of companies considered strategic for the Italian economy - i.e. those active in the sectors listed in number , above and those listed in the previous paragraph 1.1. - is a European entity[5].

2. The latest amendments

The full operation of the extensions made by the Decreto Liquidità was subject to the adoption of one or more Presidential Decrees, aimed at identifying, within the five sectors referred to in article 4, paragraph 1, letters a), b), c), d) and e) of Regulation 2019/452/EU, the assets and relations of strategic importance for the national interest in the presence of which the Golden Powers could be exercised. To this end, on 30 December 2020, the Prime Ministerial Decree no. 179/2020 was published in the Italian Official Journal (Gazzetta Ufficiale) (the “Implementing Decree of the EU Regulation”)[6].

The specifications contained in the Implementing Decree of the EU Regulation will be analyzed below, with particular reference to the sectors of: (i) energy; (ii) water; and (iii) health.

In the first of the sectors mentioned above (energy) the Decree Implementing of the EU Regulation specifies that the following are considered strategic sectors for the national interest:

  1. critical infrastructureswhere fuels, nuclear materials or radioactive waste are located or to be located, including the essential buildings for the use of such infrastructures[7];
  2. coastal stores of crude oil (greggio) and petroleum products with a capacity of one hundred thousand cubic meters or more used for the domestic market[8].

In the second of the sectors mentioned above (water) the Decree Implementing the EU Regulation specifies that the following are considered strategic sectors for the national interest:

  1. critical infrastructuresthat guarantee the continuity of the services of collection, purification, adduction, distribution and wholesale supply of drinking water for human consumption, including the critical technologies used in the management of such infrastructures[9];
  2. economic activities of strategic importancecarried out by companies with an annual net turnover (fatturato annuo netto) higher than Euro 300 million and an average annual number of employees higher than 250[10].

In the third of the sectors mentioned above (health) the Decree Implementing the EU Regulation specifies that the following are considered strategic sectors for the national interest:

  1. critical digital technologiesfor the delivery of healthcare services[11];
  2. critical technologieswhich purpose is the analysis of data and the use of biological knowledge for health and diagnostics, prognostics and therapy[12];
  3. economic activities of strategic importance, including those relating to the procurement of medicines, medical devices and equipment and related research and development activities, through the management, use or enjoyment of the infrastructures and technologies referred to in numbers i and ii above[13].

The Decree Implementing the EU Regulation also specifies which economic activities are strategic to the national interest in other sectors, including (i) processing, storage, access and control of sensitive data and information; (ii) electoral infrastructures; (iii) financial sector, including credit and insurance, and financial market infrastructures; (iv) artificial intelligence, robotics, semiconductors, cyber-security, nanotechnology and biotechnology; (v) non-military aerospace infrastructures and technologies; (vi) input supply (approvvigionamento dei fattori produttivi); (vii) dual-use items (prodotti a duplice uso); and (viii) freedom and pluralism of media (libertà e pluralismo dei media).

Lastly, it should be noted that the Decree Implementing the EU Regulation specifies that, in any of the sectors referred to in the present paragraph 2, critical infrastructure, critical technologies, critical inputs and critical information means, respectively, infrastructure, technologies, critical inputs and critical information that are essential for the maintenance of the vital functions of society, health, safety and the economic and social well-being of the population.

Among the relevant innovations regarding the exercise of the Golden Powers, it deserves to be also mentioned: (i) the issuance of the Prime Ministerial Decree no. 180/2020 containing rules for the identification of companies of strategic importance in the field of energy, transport and communications; and (ii) the extension to 31 December 2021 (the previous deadline was 30 June 2021) of the possibility that the Golden Powers can be exercised even if the purchaser of shares of companies considered strategic is a European entity[14].

3. Enforcement of the Golden Powers by the Italian Government in the recent years

According to the press, the new Italian Government headed by Mario Draghi has recently applied the Golden Powers with reference to several recent transactions. For instance, on 25 March 2021, the Government intervened in respect to a supply contract concerning the purchase, by the Italian company Linkem S.p.A., of hardware and software elements owned by the Chinese companies Huawei and ZTE. The press indicates that the Government imposed certain prescriptions to the transaction due to the possible threat on national security caused by the risk that equipment in question could be used for espionage purposes.[15] Subsequently, a veto was imposed by the Italian Government, on 31 March 2021, with reference to the purchase by the Chinese company Shenzhen Investment Holdings Co. of a controlling stake (70%) in LPE S.p.A., a company operating in the field of semiconductor production, a sector considered to be of strategic importance pursuant to article 2 of Law Decree no. 21/2012.

Finally, it is worth mentioning the sanctions issued by the Italian Government for the breach of the notification obligation imposed by the Golden Powers legislation. This occurred, in particular, with reference: (i) to the failure to notify the sale of the shareholdings of TIM S.p.A. to the French company Vivendi SA, a failure to notify which led to the application to TIM S.p.A. of a fine of Euro 74,312,342.44[16], amount corresponding to one per cent of the combined revenues of TIM S.p.A. and Vivendi SA[17]; and (ii) to the delayed notification of the resolution of the ordinary shareholders’ meeting of Reti Telematiche S.p.A. whereby the shareholders renewed the company’s Board of Directors, in execution of a shareholders’ agreement. Such delayed notification led to the application, to Reti Telematiche S.p.A, of a fine of Euro 140,137.15[18], corresponding to one per cent of the revenues of the group to which the company belongs[19].




[1] Article 1, paragraph 1, letters a) and c) Law Decree no. 21/2012, converted into Law no. 56/2012.

[2] Article 1, paragraph 1, letter b) Law Decree no. 21/2012, converted into Law no. 56/2012.

[3] Article 4(1)(a) of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019.

[4] Article 4(1)(b) of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019.

[5] It should be noted that the extension of the notification obligation to European entity purchasers, and no longer only to non-European entity purchasers, only applies in the event that the acquisition determines the control of the target company, where the word control makes reference to Article 2359 of the Italian Civil Code. In the event that the acquisition does not determine a transfer of the control over the target company, as long as the relevant percentage of voting rights transfered is at least 10%, the notification obligation continues to be limited to the non-European purchaser. Furthermore, it should be highlighted that, despite initially Golden Power rules covered only foreign invesments, the need to impede that, in strategic sectors, a change of the status quo ante the Covid-19 outbreak causes a risk for national interests, currently seems to lead the authority in charge of the control to construe the above-mentioned rules as covering also transactions between Italian companies.

[6] Previously, in order to fully implement the sectors governed by Law Decree no. 21/2012, had been issued: (i) the Prime Ministeral Decree no. 108/2014 concerning the identification of assets of strategic importance for the national defense and security system; and (ii) the Presidential Decree no. 85/2014 concerning the identification of assets of strategic importance in the energy, transport and communications sectors.

[7] Article 3, paragraph 1, letters a) and b) of Prime Ministeral Decree of December 18, 2020 no. 179.

[8] Article 3, paragraph 1, letter c) of Prime Ministeral Decree of December 18, 2020 no. 179.

[9] Article 4, paragraph 1, letters a) and b) of Prime Ministeral Decree of December 18, 2020 no. 179.

[10] Article 4, paragraph 1, letter c) of Prime Ministeral Decree of December 18, 2020 no. 179.

[11] Article 5, paragraph 1, letter a) of Prime Ministeral Decree of December 18, 2020 no. 179.

[12] Article 5, paragraph 1, letter b) of Prime Ministeral Decree of December 18, 2020 no. 179.

[13] Article 5, paragraph 1, letter d) of Prime Ministeral Decree of December 18, 2020 no. 179.

[14] Such an extention was provided by the Decree-Law no 56 of 30 April 2021.

[16] Fine imposed by Prime Ministerial Decree of 8 May 2018.

[17] Report to Parliament on the exercise of the Golden Powers communicated to the Presidency of the Council of Ministers on 1 April 2019.

[18] Fine imposed by Prime Ministerial Decree of 30 November 2018.

[19] Report to Parliament on the exercise of the Golden Powers communicated to the Presidency of the Council of Ministers on 1 April 2019.

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