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Coronavirus - “Golden Powers” extended to protect national strategic assets – Italy

  • Italy
  • Coronavirus - Country overview


On 8 April, the Italian government extended the scope of application of the so-called “golden power”, in order to protect Italian companies from hostile acquisition by foreign operators in the context of the coronavirus emergency (Law Decree no. 23/2020 of 8 April). This is following the depreciation of shares on the stock markets and the reduction of the value of companies obliged to suspend their activities upon order of the Italian government aimed at managing COVID-19 outbreak.

As is well known, the golden power has been introduced with Law Decree no. 21/2012 in order to initially protect strategic assets in the defence and national security. More recently, from 2017 and 2019, golden power has also been extended to 5G technologies, which has been included among the strategic infrastructures for the development of the country, and to those sectors listed in Art. 4 para 1 let. a) and b) of the EU Regulation no. 452/2019 (among others health, financial, food, nuclear, media, robotic sectors). It must be noted that the obligations to notify the Italian government of operations involving the sale of these new assets, however, remained suspended over the years pending the implementation decrees that shall in principle identify the strategic assets in relation to which the notification obligations shall be triggered.

Nonetheless, as we will explore later in this briefing, the Italian government has adopted an emergency legislation (especially in April 2020 following COVID-19 outbreak) which has triggered the notification obligations upon the companies concerned, although the adoption of the implementing decrees is still pending.

That noted, firstly we will describe the changes introduced with the recent Law decree no. 23/2020 adopted to avoid - as mentioned – uncontrolled acquisition by foreign operators following the economic crisis triggered by the pandemic. Finally, we will draw brief conclusions and explain the need for assistance of companies in light of this amended regulatory context.

The amended golden power

As anticipated, the Italian government introduced back on 8 April with Law decree no. 23/2020 an even more stringent transitional regulation on golden power.

In particular, Art. 15 of the Law decree in question extended the objective scope of golden power. As a result, the notification obligations, up to the date of entry into force of the implementing decrees, applies to the acquisitions by a non-EU entity of companies that hold assets and relationships in the sectors referred to in Article 4, para 1, let. a), b), c), d) and e) of the EU Regulation no. 452/2019, including financial, credit and insurance sectors.

In addition, on a temporary basis until 31.12.2020, the foreign acquisitions shield, firstly, applies for notification of resolutions adopted by an Italian company which hold assets and relationships in the aforementioned sectors and to the extent it only concerns change in the ownership, control or availability of these assets in favour of a non-Italian entity (even based in the EU) or change in the destination of such assets.

Secondly, in the transitional period, a second obligation to notify applies in case an EU investor acquires the control of a target operating in the sectors listed in Art. 2 para 1 of Law decree 21/2012 (energy, transport and communications) and those reported in Art. 4 para 1 of the EU Regulation no. 452/2019. Moreover, the notification must be submitted even in case a non-EU investor acquires a participation at least equal to 10%, in a company which holds assets and relationships in the above-mentioned sectors, with an investment not lower than € 1.000.000. This is required even if the buyer is an Italian entity, to the extent the final beneficiary is a company based in a third country since, according to Art. 2 para 5-bis of Law decree 21/2012, it must be considered the ultimate beneficial owner (“UBO”). 

In addition, Art. 16 of Law Decree 23/2020 introduced the possibility for the government to open ex-officio the procedure, if the companies do not comply with the notification obligations.

Finally, Art. 17 of Law Decree 23/2020 allows CONSOB[1] to lower the relevant thresholds for communications (bringing it to 5%) and to expand the list of companies that are subject to it, including the companies with share ownership. This intervention on the thresholds, together with the enhancement of the notification obligations to the Prime Minister's Office, will make it possible to extend the protection also to small and medium-sized enterprises.


It is clear that the adoption of these new rules will have a significant impact on foreign investments in Italy. Indeed, the interested undertakings will not only have to take into account the notification obligations possibly due in accordance with the antitrust and sectoral regulations, but they will have also to consider such enhanced legal framework.

Nonetheless, companies in this transitional phase will have an objective difficulty in interpreting the relevant legislation – subject to continuous changes - in order to understand the cases in which the notification obligations are triggered and how to proceed from a procedural standpoint.

For instance, a company may wonder:

i)             if its activities falls within the scope of application of the golden power;

ii)           ii) if the notice could be filed before the execution of the Sale and Purchase Agreement (“SPA”) (e.g. during the negotiation phase) so that to reduce the interim period;

iii)          iii) if it is advisable to provide in the SPA as a condition precedent the obtainment of the clearance from the government;

iv)          iv) or if the obligation applies also in case of intra-group transactions.

For all these reasons, a legal assistance seems to be necessary. It should also be borne in mind that in the event of a breach of the notification obligations, a fine is provided up to double the value of the transaction and in any case not less than 1% of the accumulated turnover achieved by the companies involved in the last financial year. Therefore, a cautious approach and a strong legal support seems appropriate to avoid heavy penalties, as well as to evaluate the convenience of the deal.

[1] The National Commission for Companies and the Stock Exchange (better known as “CONSOB”) is the body aimed at investor protection, efficiency, transparency and development of the Italian securities market