Newspaper article The Evening Standard (London, England)

Powerful Test for Monti in EDF's Montedison Move

Newspaper article The Evening Standard (London, England)

Powerful Test for Monti in EDF's Montedison Move

Article excerpt


MARIO Monti, the European Union's Competition Commissioner, faces a second test of his toughness this week. Having had the nerve to face down the American government and block the proposed merger between GE and Honeywell, he now has to decide what, if anything, to do about the attempts by Electricite de France (EDF) to build up a stake in Italian electricity generator Montedison.

It is a classic tale of European-style intrigue. EDF is a State-owned monopoly with access to cheap capital and immunity from takeover. It has been buying businesses overseas for years including our London Electricity - but no one can do to it at home what it is doing to others abroad.

Successive governments have talked tough - Helen Liddell on the British side was notably vocal three years ago but nothing has happened. The French have resisted all efforts to open up their domestic utilities market and were still dragging their feet at the most recent summit in Gothenburg.

Partly because of this lack of reciprocity, or at least using it as a pretext, the then Italian government - the one before Silvio Berlusconi's - used a fairly dubious tactic to thwart the first run at Montedison earlier this year. It said no matter how many shares were bought by EDF, they would only have 2% of the voting rights.

The world has moved on since then. Italy got a new Prime Minister in media magnate Berlusconi, who rose to power at least in part with the backing of the Agnelli family of Fiat fame. Some Agnelli interests who appear to be acting with the support of EDF have renewed the assault on Montedi-son, so that it looks like an Italian bid rather than a French one.

So far the Italian government and Berlusconi-controlled media appear to be supporting this bid and there are inevitably dark but unproven allegations that Agnelli's price for supporting Berlusconi in the election was to get a clear run - which if successful would effectively deliver Montedison to the French. …

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