Ownership, Control and Shareholder Value in Italy: Olivetti's Hostile Takeover of Telecom Italia

Abstract

I examine ownership structures, minority shareholder rights, and shareholder activism in the context of Olivetti's successful hostile acquisition of Telecom Italia in 1999. Events surrounding the takeover provide mixed evidence of improvements in minority shareholder protections. The story, which gives a fascinating picture of the evolution of Italian corporate governance, is unusual, in that minority shareholders were more willing to stand up for their rights. Moreover, privatization and the introduction of the euro have resulted in shifts in ownership and financing patterns. However, due to the concentration of ownership of listed companies, hostile takeovers in Italy will remain rare.

Keywords: Ownership Structure, Shareholder Value, Mergers and Acquisitions, Investor

JEL Classification: G32, G34, G38, F21